Eye on the Horizon
Last week we issued our long-run forecasts for the New Zealand economy, out to 2023. The primary motivation was to trace out to its full conclusion the upcoming economic cycle. We have long argued that the Canterbury rebuild and rising house prices would create an economic upswing. Our long-term forecasts make the additional point that the drivers of that upswing are temporary. The Canterbury rebuild will wind down in the second half of the decade, and house price inflation is likely to slow or go into reverse at the same time. When that happens, the economy will slow and interest rates will have to retreat off their highs.
Read the full report: Market Research
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