-Cameron Bagrie, chief economist at ANZ
Consumer confidence in New Zealand declined to the lowest level in 12 months as households feel less upbeat about the economic outlook, particularly over the next five years. The ANZ-Roy Morgan consumer confidence index dropped 4.3 points to 123.4 this month, but the gauge remained above its long-run average of 118.8. The current conditions inched up 0.3 of a point to 124.4, whereas future conditions fell 7.4 points to 122.8. The decline follows the Reserve Bank of New Zealand decision to pause its interest rate hiking cycle to assess the effect of its four increases so far this year and as the growth pace is set to slow somewhat from a peak in the first half of the year. Positively though, most consumers still felt better off financially than they did a year ago, and were more inclined to buy a major appliances this month. Some 77% of people surveyed anticipate interest rates to increase over the coming two years, at an annual pace of 3.7%, and 70% expect house prices to rise an annual 4.1% over the coming two years.
The New Zealand Dollar strengthened versus the Japanese Yen as upbeat US economic data supported sentiment on global growth, encouraging investors to cut holdings of safe haven currencies such as the Yen.
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