Forecasters lower expectations for New Zealand economic growth

Forecasters are paring back New Zealand's growth expectations for the coming year, reflecting weaker growth in investment, an independent economic think-tank said Monday.

A quarterly survey of economic forecasters showed economic activity picking up, but expectations for annual average growth staying well below 3 percent out to 2019, according to the New Zealand Institute of Economic Research (NZIER).

Forecasters expected growth to ease to 2.2 percent in the March 2016, before recovering to 2.5 percent in March 2017 and 2.7 percent by March 2018.

The decline of the New Zealand dollar would weigh on business investment, given the higher costs of imported machinery, said the NZIER Consensus Forecasts report.

Expectations for the unemployment rate had lifted slightly with the unemployment rate expected to ease from 6 percent currently to 5.6 percent by 2019.

Consumer confidence had recovered in recent months, but with wage growth still subdued and imported goods to increase in price due to the weaker currency, a degree of caution remained among households.

The weaker dollar was giving a boost to exporters, and the tourism sector was "a standout," but the export growth outlook was clouded by a large degree of uncertainty.

Forecasts of housing construction growth have again been pared back for the coming year, although the level of activity is expected to remain very high out to 2018, with demand boosted by the continued surge in net migration. Endit