Alert over rising New Zealand debt

Rising household and farm debt is the biggest dark cloud in a generally positive outlook for the New Zealand economy, the country’s main business lobby said. Although the outlook for the economy remained positive with a respectable growth rate of around 3 percent expected over the period to June 2018, households appear to have “partially forgotten the lessons of the past” and debt is increasing at a time when servicing costs are relatively low, with historically low interest rates, according to a report from the Business New Zealand group. Household debt levels continued to rise “precipitously,” while agricultural debt, largely in dairy farms, leaves New Zealanders exposed should asset prices burst or interest rates rise.