20 Mar 2015
New Zealand: 2014 will be as good as it gets - Capital Economics
FXStreet (Bali) - 2014 will be as good as it gets for New Zealand, notes Paul Dales, Chief Australia & New Zealand Economist at Capital Economics.
Key Quotes
"The outlook for New Zealand remains stronger than the prognosis for Australia. Nonetheless, the 3.0% rise in GDP in New Zealand last year will mark the peak of the current cycle. We expect that the delayed hit from the fall in dairy prices and the temporary effects of the drought will contribute to a slowdown in growth this year to around 2.3%."
"Meanwhile, the good news from the rise in vehicle sales in Australia in February has been offset by the fall in the iron ore price to a new low of $55.5 a tonne, which will hit mining. The outlook for policy is therefore unchanged. In fact, the minutes of the March meeting suggested that the data would not need to weaken further for the RBA to cut rates in April or May."
"This week is relatively quiet for Australia and New Zealand, with the main event being the release of New Zealand’s trade balance for February (due on Wednesday). We estimate that the seasonally adjusted balance swung from a small surplus in January to a deficit in February, as the drag on export values from lower dairy prices more than offset the drag on import values from lower oil prices."
Key Quotes
"The outlook for New Zealand remains stronger than the prognosis for Australia. Nonetheless, the 3.0% rise in GDP in New Zealand last year will mark the peak of the current cycle. We expect that the delayed hit from the fall in dairy prices and the temporary effects of the drought will contribute to a slowdown in growth this year to around 2.3%."
"Meanwhile, the good news from the rise in vehicle sales in Australia in February has been offset by the fall in the iron ore price to a new low of $55.5 a tonne, which will hit mining. The outlook for policy is therefore unchanged. In fact, the minutes of the March meeting suggested that the data would not need to weaken further for the RBA to cut rates in April or May."
"This week is relatively quiet for Australia and New Zealand, with the main event being the release of New Zealand’s trade balance for February (due on Wednesday). We estimate that the seasonally adjusted balance swung from a small surplus in January to a deficit in February, as the drag on export values from lower dairy prices more than offset the drag on import values from lower oil prices."