New Zealand Insights - September 2018

By AMP Capital

The New Zealand economy is in the more challenging phase of the economic cycle. The easier growth that comes as spare capacity is gradually absorbed has turned to the hard grind of capacity constrained growth. Business confidence has continued to slide, but strong population growth and terms of trade at near record highs provide key supports for growth. The good news is that interest rates are low, and conditions are right for higher investment and a cyclical recovery in productivity. At the same time, the monetary policy outlook is uncertain, and the New Zealand dollar has been on a weakening trajectory.

Key points


Growth has slowed but not collapsing in a hole


Expect growth to hold up in the near term


Weakness in business confidence can’t be dismissed


Inflation is moving higher


Monetary policy outlook is uncertain


New Zealand dollar may see further weakness

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Important notes

This article has been prepared to provide general information and does not constitute 'financial advice' for the purposes of the Financial Advisors Act 2008 (Act). An individual investor should, before making any investment decisions, consider the information available in the relevant Product Disclosure Statement and seek professional advice. While every care has been taken in the preparation of this document, AMP Capital Investors (New Zealand) Limited and the AMP Group (together, 'AMP') make no guarantee that the information supplied is accurate, complete or timely and do not make any warranties or representations in respect of results gained from its use. The information is not intended to infer that current or past returns are indicative of future returns. The views expressed are those of the author and do not necessarily reflect those of AMP. These views are subject to change depending on market conditions and other factors.

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