NZ: Soft GDP growth of 0.4% expected in Q1 - ANZ
|Analysts at ANZ expect that New Zealand’s GDP will expand 0.4% q/q, a softer print than recent performance, while annual growth is expected to moderate from 2.9% to 2.6% y/y (below where ANZ see trend), as growth momentum continues to slow from the 4½% annual pace experienced in mid-2016.
Key Quotes
“Services industries are expected to make the largest contribution to growth in the quarter (increasing 0.6% q/q). Services strength is expected to be broad based, with an easing in wholesale trade (-0.4%) the only exception.”
“We expect primary industries to only partially recover (+0.6% q/q), after falling 2.4% in Q4.”
“Net exports are expected to drag on the expenditure-based measure of GDP, and we wouldn’t be surprised to see it undershoot its production-based equivalent. Exports are expected to decline 1.6%, while imports are expected to increase 1.7%.”
“The economy is clearly facing headwinds. Quarterly GDP growth has averaged 0.9% since 2014, but we expect it will be difficult to achieve such strong rates of growth from here.”
“That said, we don’t expect the cycle to completely roll-over just yet. Despite headwinds, the economy appears resilient and doesn’t have the degree of imbalances (especially external imbalances) that have often been the catalyst to tip the cycle over in the past.”
“With regards to the Balance of Payments, we expect the seasonally adjusted current account deficit will widen. We have a $3.0bn seasonally adjusted deficit pencilled in, which is around $1.0bn larger than in Q4. However, the annual deficit isn’t expected to widen nearly as much due to base effects. With nominal GDP expected to lift, the annual deficit is expected to remain stable at 2.7% of GDP.”
“Our expectation for a widening seasonally adjusted current account deficit reflects a widening of the goods deficit.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.