New Zealand Economic Forecast

New Zealand Economic Outlook

December 16, 2021

The economy is expected to have contracted sizably in the third quarter, due to the reintroduction of restrictions in August and September amid rising new Covid-19 cases. Retail sales took a considerable hit in the quarter owing to lockdowns, with the Auckland region bearing the brunt of the damage. Moreover, falling business and consumer confidence point to weaker dynamics. Moving into the final quarter of the year, the economy should be benefiting from the gradual easing of containment measures. That said, a further decline in business sentiment in October-November hints at subdued private sector activity, while falling consumer confidence in the same period also calls for caution. Meanwhile, the government recently announced that it will reopen its borders over the coming months, with displaced residents allowed to return from January and tourists from April.

New Zealand Economic Growth

The economy is expected to expand at a healthy pace in 2022. A supportive fiscal stance and unleashed pent-up spending should fuel domestic demand, while sustained global demand for commodities is set to buttress the external sector. However, pandemic-related uncertainty and prolonged global supply bottlenecks pose downside risks. FocusEconomics panelists project the economy to grow 3.5% in 2022, which is up 0.1 percentage points from last month’s estimate, and 2.7% in 2023.

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New Zealand Facts

Value Change Date
Bond Yield1.671.20 %Dec 30
Exchange Rate0.67-1.69 %Jan 01

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