New Zealand’s Treasury: Economy will skirt recession in 2023
In its latest report, New Zealand’s Treasury Department predicted that the economy will narrowly avert a recession next year, in the face of rising rates and slowing demand.
Key quotes (via Bloomberg)
“Treasury projects inflation will slow from 6.9% today to 5.2% by June 2023. It doesn’t see it returning to the RBNZ’s 1-3% target range until early 2025.”
“As usual, the Treasury included an alternative scenario in the budget. “
“The downside slant -- which assumes more persistent inflation and a sharper rise in interest rates -- makes for grim reading, projecting five straight quarters of GDP declines starting in early 2023 as well as a surge in unemployment.”
RBNZ policymakers meet next week, with another half-percentage-point hike in the official cash rate (OCR) on the cards.
Market reaction
Amid recession warnings, NZD/USD is trading 0.16% lower on the day at 0.6367, as of writing. The US dollar has regained its lost ground vs. its major peers.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
