Off the wire
• 1st LD: Indonesia's annual inflation in May eases to weakest in 7 years  • Australia's economy grows 3.1 pct, fastest in more than 3 years  • Toyota suspends more production lines following explosion at parts supplier  • 1st LD: China plans 5 new space science satellites  • Urgent: Blast near provincial court in Afghan eastern Ghazni city, casualties feared  • Indonesia sees increase in foreign tourist arrivals in April  • Fiji congratulates Samoa on 54th independence anniversary  • Roundup: S. Korea's current account surplus falls to lowest in over 2 years  • South China Sea issue should be resolved via negotiations by parties concerned: Cambodian defense minister  • Brazil to set up specialized organ against gender violence  
You are here: 　 Home

New Zealand economy on track for solid growth: forecast

Xinhua, June 1, 2016 Adjust font size:

New Zealand's economy will grow at an average rate of about 2.8 percent over the next few years on the back of population growth, construction and tourism, an independent economic think-tank forecast Wednesday.

The New Zealand economy was showing reasonable momentum, with households and businesses resilient in the face of offshore volatility earlier this year, said a report from the New Zealand Institute of Economic Research (NZIER).

"Net migration has been much stronger than expected over the past year. This will boost demand across a wide range of sectors, including retail and housing," NZIER senior economist Christina Leung said in a statement.

"Meanwhile, low fuel prices and rising middle class incomes in the major economies, particularly China, are supporting continued strong tourism activity. This is injecting income into regional economies."

The inflation outlook remained subdued and inflation was not expected to edge up into the Reserve Bank of New Zealand's (RBNZ) target band of 1 percent to 3 percent until the end of this year.

However, house price inflation was broadening and strengthening beyond the biggest city of Auckland, home to a third of New Zealand's population, into neighboring regions.

These factors suggested the RBNZ had further scope to cut the official cash rate (OCR), although the timing of the next cut was highly uncertain.

Whether it would cut the OCR, currently at 2.25 percent, in its six-weekly review out next was "a very close call," but it could choose to wait until August.

The RBNZ has repeatedly warned that soaring house prices in Auckland pose a risk to the country's financial stability. Endit