Otago Daily Times

Hous­ing boom spurs bank to lift fore­cast

- LIAM DANN Business · Unemployment · Finance · Stocks & Markets · Employment · Society · Financial Markets · Greater Auckland · New Zealand

AUCK­LAND: Econ­o­mists at New Zealand’s largest bank have up­graded their fore­casts for the com­ing year, pick­ing the boom­ing hous­ing mar­ket will boost con­fi­dence.

‘‘We now see GDP bounc­ing back a lit­tle bit more strongly through the sec­ond half of this year,’’ ANZ chief econ­o­mist Sharon Zoll­ner says in a new re­port.

‘‘The un­em­ploy­ment rate is ex­pected to rise a bit more slowly than pre­vi­ously as­sumed, with ac­tiv­ity a lit­tle stronger, the wage sub­sidy de­lay­ing job losses, and ef­fects of the closed bor­der not ev­i­dent just yet.’’

While she still ex­pected the econ­omy to face chal­lenges, a buoy­ant hous­ing mar­ket and a less pes­simistic busi­ness out­look were likely to cush­ion the blow to un­em­ploy­ment and spend­ing.

The REINZ House Price In­dex last week showed an in­crease of 11.1% to a new high.

The ANZ Busi­ness Out­look Sur­vey has also pointed to a steady im­prove­ment in con­fi­dence for the past two months, al­beit from low lev­els.

ANZ now fore­casts GDP growth of 10% in the quar­ter to Septem­ber 20 and growth of 2.5% the De­cem­ber quar­ter.

That would take the GDP drop for the cal­en­dar year to just ­2.4%.

How­ever, it sees a neg­a­tive first quar­ter for 2021 fol­lowed by low growth through into 2022 as the im­pact of closed bor­ders and the global down­turn takes its toll.

It is pick­ing un­em­ploy­ment will come in at 5.4% for the Septem­ber quar­ter but will rise steadily to peak at 7.4% by late 2021.

The out­look was look­ing a bit more pos­i­tive for the Re­serve Bank than was in­cluded in the Au­gust MPS fore­casts, Ms Zoll­ner said.

‘‘But down­side risks re­main. We ex­pect that the RBNZ will drop the OCR 50bps (ba­sis points) in April next year, but risks around this out­look are look­ing more bal­anced, rather than firmly to the down­side.’’ — The New Zealand Her­ald

 ?? PHOTO: THE NEW ZEALAND HER­ALD ?? ANZ chief econ­o­mist Sharon Zoll­ner
PHOTO: THE NEW ZEALAND HER­ALD ANZ chief econ­o­mist Sharon Zoll­ner

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