- Christina Leung, NZIER economist
Business confidence in New Zealand fell in the three months through March, but companies remained optimistic, NZIER reported. A net 23% of firms surveyed by the New Zealand Institute of Economic Research anticipate general business conditions to ameliorate, compared with a revised 24% three months earlier. In addition, a net 4% of financial services businesses predict interest rates to decline over the next 12 months, swinging from a net 17% expecting a rate hike in the December quarter. The NZIER added that companies pared back expectations for business activity, as building activity and retail sales declined and overall momentum in the nation's economy weakened after more than a year of robust growth. The survey paints a slightly softer picture of business sentiment compared with the monthly ANZ Business Outlook, which jumped to the highest level in seven months in March.
In its March monetary policy statement, the Reserve Bank of New Zealand said the nation's economy remained resilient, although the drought, fiscal consolidation, falling dairy incomes and the strong New Zealand Dollar would weigh on growth. The central bank projected no increase in interest rates over its forecast horizon, as the RBNZ predicts inflation to remain below the mid-point of the 1%-3% target band through March 2017.
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