New Zealand sees three quarters of negative GDP growth in CY23

Ross J Burland FXStreet

In the Half Year Economic and Fiscal Update, the New Zealand Treasury has forecasted three-quarters of a shrinking economy starting in the second quarter of 2023.

Key notes

Lifts planned bond issuance by nz$18bln over 4 years.
Forecasts return to budget surplus in 2024-25.
Fiscal policy will help RBNZ battle inflation.
Government will run contractionary fiscal policy.
To end cut in gasoline tax by March 31.
Actual and expected inflation is too high and needs to be reduced.
Expect spending to slow and unemployment levels to increase as more people join the workforce over the coming year.
It is anticipated that the level of employment will remain high.
Even with the expected slowdown in the period ahead, it is anticipated that the level of employment will remain high.

NZD/USD update

Fuelled by a softer US dollar, the Kiwi has managed a score into the 0.6500s through 0.6450 resistance ahead of today's Federal Open Market committee.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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