Slower growth tipped
New Zealand’s economy will likely grow at a slower pace than Treasury is forecasting due to weak business confidence and declining consumer confidence, according to Fitch Solutions Macro Research. It noted business confidence remains on a downward trend with a figure of negative 37.1 points in November, down from positive 24.8 in June 2017. Consumer confidence has also fallen to 115.4 points in October from a peak of 128 in March last year “suggesting the potential for lower consumer spending over the short term,” Fitch says. Fitch’s dimmer view of growth prospects is why it expects the government’s fiscal surplus will likely shrink to 0.8 per cent of GDP this year and to 1.2 per cent next year from 2.1 per cent in the year ended June 2018.