Forecasters tone down expectations for New Zealand economic growth

Forecasts of New Zealand's economic growth have softened on the back of weaker household spending and business investment, an independent economic think- tank said Monday.

A quarterly survey of economic forecasters showed they had revised their growth expectations downwards since the last survey in June, and indicated a greater degree of uncertainty over the economic outlook, according the New Zealand Institute of Economic Research (NZIER).

Annual average economic growth was expected to track below 3 percent out to 2019, said the NZIER Consensus Forecasts report.

Forecasters expected growth to ease to 2.5 percent in the March 2016 year, before recovering slightly to 2.6 percent in each of the following two years.

Consumer confidence had fallen sharply in recent months, and the increased uncertainty, along with the weaker New Zealand dollar, was likely to rein in spending.

The export growth outlook also remained uncertain with near- term growth revised up on the back of the lower exchange rate, but weakening in the following year.

Housing construction growth had been pared back for the coming year, but the level of activity remained high, it said.

The weaker economic outlook was expected to flow through to a softening in the labor market, with forecasters on average expecting the unemployment rate to hold up around the current 5.9 percent for the next two years. Endi