“The latest NZIER Consensus Forecasts show an upward revision to the near-term growth outlook for the New Zealand economy, but softer growth is forecast for the subsequent year,” said the New Zealand Institute of Economic Research (NZIER) in its latest report published during early Monday morning in Asia.

It should be noted that NZIER revised up 2021-22 GDP forecast to 5.2% from 4.3% (expected in December) but anticipated 2022-23 growth to ease from 4.6% previous forecast to 3.6%.

Additional quotes

These revisions reflect recent activity indicators, suggesting that while the New Zealand economy weathered the latest lockdown reasonably well, there is more caution about the longer-term outlook.

With the latest Omicron surge widespread across the country, fears of infection or having to self-isolate has seen people limit their movements even though restrictions were relaxed in December last year.

Annual growth in the Consumers Price Index (CPI) picked up sharply to 5.9 percent for the year to December 2021 – well above the Reserve Bank’s 1 to 3 percent inflation target band. Annual inflation is expected to pick up further, particularly as higher global crude oil prices drive up petrol prices here at the pump.

Consensus Forecasts for GDP have been revised higher in the near term, as the negative impact of the latest lockdown appears milder than initially expected. However, heightened uncertainty over what the accelerating spread of Omicron would mean for economic activity as people limit their movements for fear of infection or self -isolation has reduced growth forecast for the subsequent year.

NZD/USD drops

The news exerts additional downside pressure on the NZD/USD prices as the quote drops back towards the intraday low of 0.6888.

Read: NZD/USD begins the week on a back foot around 0.6900 on mixed NZ trade data, Ukraine woes

This article was originally published by Fxstreet.com.Read the original article here.

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