NZIER Consensus Forecasts show weaker near-term economic outlook

New Zealand’s economic outlook appears weaker in the near term, the latest NZIER Consensus Forecasts (CF) showed Monday.  

Additional takeaways

This largely reflects the expected impact of restrictions to contain the latest COVID-19 community outbreak, which turned out to persist for longer than initially expected.

As a result, forecasts for private domestic demand for the coming year were revised lower.

However, beyond March 2022, forecasts were shifted higher, suggesting that the New Zealand economy is still expected to remain resilient.

Growing capacity pressures in the New Zealand economy are contributing to a sharp rise in inflation.

Beyond near-term expectations of annual CPI inflation rising above 5 percent in 2022, price rises are expected to remain elevated above the Reserve Bank’s inflation target mid-point of 2 percent through to 2025.

NZD reaction

NZD/USD is back under 0.6800 on these headlines, trading at 0.6793, as of writing. The major is lower by 0.06% on the day.