NZIER Consensus Forecasts show a weaker economic outlook for years beyond 2024

According to the latest New Zealand Institute of Economic Research (NZIER) Consensus Forecasts, New Zealand's economy is seen resilient over the coming year but the growth could be revised downward for 2025 and 2026.

Additional takeaways

As more fixed-term mortgages get repriced within the next twelve months, the dampening effect of interest rate increases on economic activity will become more apparent over the coming years.

Household consumption has been revised down beyond 2024.

Despite a strong starting point for export growth, the forecasts of export growth have been revised lower for years after 2023.

Consensus Forecasts for GDP growth show a mixed outlook for the next few years. Annual GDP growth for the year s ending March 2023 and March 2024 has been revised up to 3.1 percent and 1.1 percent , respectively. However, forecasts for growth beyond 2024 have been revised lower.

The NZD is expected to track around 71 on the TWI over the coming years.

Annual CPI is forecast to moderate to 3.4 percent in 2024 and ease to 2.2 percent in 2026 – still above the RBNZ inflation target mid -point of 2 percent.

The outlook for interest rates has again been revised up across the projection horizon.

Market reaction

NZD/USD is heavily offered in Asian trading this Monday, as risk-off flows dominate kicking off a critical week. The pair was last seen trading at 0.6386, down 0.30% on the day.