NZ Elections: Spotlight on Winston – ANZ

The NZ election delivered the balance of power to NZ First on the weekend hich means both the centre right and left will be on the charm offensive over the coming weeks to form a coalition, explains the analysis team at ANZ.

Key Quotes

“Winston Peters has indicated a final position will be reached by the 12th October at the latest. Given National secured the largest share of the vote it would seem a centre-right government is the most likely outcome – but by no means guaranteed. The likes of the NZD may well find initial support, but exact certainty could just as well weigh too. Until final clarity is reached markets are likely to be sensitive to coalition developments.”

“Stepping back, one certainty either way is a large fiscal boost will be in the wings for 2018/19, but just how large is still to be determined. This may well be required to offset key growth drivers, such as housing, net migration and tourism, which all look to be starting to run out of steam. While the last thing the NZ economy needs is a drawn-out process to form a coalition, the ability of an economy to navigate uncertainty shouldn’t be underestimated. The case in point at present is the US and UK economies.”