Ratings agency warning clouds New Zealand economic outlook

New Zealand Prime Minister John Key on Wednesday defended the state of the national economy even as international analysts downgraded the country's growth prospects.

Ratings agency Fitch highlighted weaker prices for New Zealand's agriculture exports as it revised down its assessment of New Zealand's near-term growth prospects.

It held the country's sovereign rating at AA, but forecast economic growth of 2.4 percent this year, and 2.6 percent in 2017, a slower pace than earlier forecast.

However, Key said in a published speech to the Auckland Chamber of Commerce that New Zealand was "well placed" looking to the year ahead.

"Global dairy prices remain low. But over time, they will recover and the New Zealand dairy sector is well-placed to attract growing numbers of middle-class customers in key markets," said Key.

"In the meantime, tourism, construction, international education, ICT, high-tech manufacturing, services and a number of our primary industries are all growing and underpinning a solid outlook."

Unemployment remained at 6 percent, but New Zealand had the third highest employment rate in the developed world.

However, opposition lawmakers said the Fitch assessment, which came the day after Treasury figures showing a growing government deficit, revealed cracks in the government's economic management.

Both the main opposition Labour Party and the Green Party called on the government to diversify the economy away from an over-reliance on the dairy industry. Endit