No really, the economy is improving
Westpac has released its latest economic overview, which says the economy is regaining momentum after a turbulent period.
Good news for New Zealand's economy, according to Westpac's latest economic outlook. Chief Economist Kelly Eckhold says the country has been handling the aftermath of the Iran war well and is on track for positive growth. The third quarter saw the economy edging towards growth, even if it wasn't above the previous trend figures.
Eckhold forecasts a 2% growth for the full year, which he expects to increase to 3% the following year. Strong export prices, a good tourism season, and solid growth in trading partners are all contributing to this upward trajectory. Imports are also benefiting from low short-term interest rates, which are beginning to help the construction sector and household demand.
Inflation, however, remains a concern at 4.1%, with core inflation persistently above the Reserve Bank's target band for five years. Eckhold predicts the official cash rate will rise to 4% by the end of the year to control inflation. The unemployment rate is expected to hover around 5.4% before dropping to 4.9%. While improvements to household finances are expected, it may take until the end of the year and possibly into next year for the unemployment rate to start a downward trend.
Despite the challenges ahead, such as the ongoing Middle East situation and upcoming elections, Eckhold sees promising signs that the New Zealand economy will continue to improve.
Written by urgent.news from RNZ Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
