New Zealand Treasury says there is no near term turning point seen for the economy

From the New Zealand Treasury’s Economic Update, issued late last week:

  • Weak housing market, lower food prices and expected inflation highlights low demand
  • No turning point in sight amid lower retail spending and sector-wide business activity

Treasury include a forecast for Wednesday’s Reserve Bank of New Zealand meeting, with the consensus:

  • Indicators continue to point to low demand heading into the
    second quarter affecting consumers and businesses alike.
  • A convincing drop in inflation expectations, discretionary
    spending and normalising patterns of migration will be
    welcome news to the Reserve Bank but a rate cut at (this) week’s Monetary Policy Statement is unlikely.
  • Furthermore,
    business sentiment across all sectors show no sign of a
    turning point in the near term painting a bleak picture at
    least in the domestic economy.

On China (a major NZ trading partner):

  • Weaker-than-expected credit data, along with soft inflation,
    easing sentiment in manufacturing and services surveys
    and persistent housing market weakness confirm subdued
    domestic demand amidst weak consumer confidence.

This article was written by Eamonn Sheridan at Source