tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, July 10th, 9:53AM

News

rss
Latest Headlines

Economic outlook still positive: ASB

Investors are being told to expect less economic growth over the second-half of the year – but the slowdown should not last.

Wednesday, November 15th 2017, 6:00AM

ASB has released its latest Quarterly Economic Forecasts, which indicate short-term wobbles due to election uncertainty. But they should dissipate in time for growth to firm to about 3% per year by mid next year.

ASB chief economist Nick Tuffley said it was a typical market response to a new government.

“But we emphasise that any uncertainty is going to be short-lived. It’s important to remember the underlying economic picture is what will have the dominant influence on the business environment. Local and overseas influences point to overall economic growth around 3%, which is still pretty decent,” Tuffley said.

“Even with some looming changes to the Reserve Bank’s policy target, interest rates are still likely to be low for some time, certainly over the next year.”

He said the government policies likely to have the most economic effect included curbs on immigration, faster wage growth due to increases in the minimum wage and slightly weaker house prices.

Tuffley said the global economy was turning the corner, slowly. Political tensions and pressure points remained but the outlook had improved for most of New Zealand’s trading partners.

“At the centre of the improvement is China, with its improved outlook lifting many boats. As Chinese growth moderates over 2018, we anticipate that the global-growth baton will be shared around. With this in mind, we are cautiously optimistic that the global growth recovery can be sustained."

ASB is picking a rate of growth for China of 6.8% over the year.

The bank was also more upbeat on US prospects, with increased optimism that Trump could implement tax reforms to lift US growth.

"We anticipate that Congress is likely to pass modest tax cuts worth around 0.6% of US GDP in 2018 and 2019. As a result, we have increased our US GDP growth forecast for 2018 from 2.2% to 2.5% and for 2019 from 1.8% to 2.1%. Given the stronger US growth outlook, we also expect the US Federal Reserve to remove monetary stimulus slightly earlier than we had previously expected."

But Tuffley said the outlook for local interest rates was muddied by the new government, which plans change to the Reserve Bank Act.

"These changes are unlikely to change the average level of NZ interest rates over the longer term. However, by targeting two economic variables, rather than one, there is a chance that monetary policy could develop slightly differently over the economic cycle than if the RBNZ continued to solely target inflation."

He said, while the dollar had fallen since the election, the underlying dries of its strength remained in place.

"New Zealand’s near record-high Terms of Trade, strong export commodity prices and narrow current account deficit will continue to support the NZD outside of these near-term headwinds."

Tags: ASB interest rates investment Reserve Bank

« FMA focus on financial adviceReport, not court action, for Goldman Sachs »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • Harking back to the old days
    “Really positive news. NZ has been blessed by many successful leaders and it is good that their skills can skill be utilised...”
    3 hours ago by Francis L
  • Harking back to the old days
    “I dare say Cigna just got that extra grunt it's been looking for....”
    4 hours ago by Matron
  • Greens want ACC extended to cover sickness
    “The Greens have no idea The purpose of the Woodhouse report was to remove the "at fault" component of accidents Sickness...”
    20 hours ago by LNF
  • Commission disclosure: What's material?
    “The consumer should know that there is at times large amounts of comission involved but it has to be balanced with not confusing...”
    1 day ago by Good Hamish
  • Commission disclosure: What's material?
    “There should be no place for a subjective materiality test in the disclosure regulations, especially where is is the party...”
    1 day ago by Paul Flood
Subscribe Now

Weekly Wrap

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 3.19 3.19 3.49
AIA Special - 2.69 2.69 2.99
ANZ 4.44 3.15 3.25 ▼3.39
ANZ Special - ▼2.55 ▼2.69 ▼2.79
ASB Bank 4.45 3.19 3.19 3.49
ASB Bank Special - 2.69 2.69 2.99
Bluestone 4.44 4.44 4.44 4.44
BNZ - Classic - 2.65 2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.25 3.29 3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union South 5.65 4.75 4.75 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.60 2.65 2.80
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 3.99 2.58 2.68 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.40 3.54 4.00
Kiwibank - Capped - - - -
Kiwibank - Offset - - - -
Kiwibank Special 3.40 2.65 2.79 3.25
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.49 3.45 3.39 3.69
SBS Bank 4.54 3.29 3.19 3.49
SBS Bank Special - 2.79 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 ▼2.69 ▼2.75 ▼2.99
The Co-operative Bank - Standard 4.40 ▼3.19 ▼3.25 ▼3.49
TSB Bank 5.34 ▼3.35 3.49 3.79
TSB Special 4.54 ▼2.55 2.69 2.99
Wairarapa Building Society 4.99 3.75 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.55 2.69 2.79
Median 4.55 3.19 3.22 3.39

Last updated: 10 July 2020 9:02am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com