Growth here, there, not quite everywhere

Westpac has upgraded its GDP growth expectations from 0.4% to 0.7% meaning a strong case for the RBNZ to leave the OCR unchanged at its July review.

Senior economist Michael Gordon says the bank is encouraged by the increasing breadth of the GDP upturn and most sectors are expected to report some modest growth.

This is coming from lower interest rates doing their work; a bit of the improving fortunes in the primary sector; a bit of the sustained recovery in international tourism; and, maybe, a bit of last year’s downturn simply not being as bad as reported.

Gordon says the main factor is New Zealand’s interest rate easing cycle being further advanced than most other developed economies, and that relief is gradually working its way through to households and businesses.”