This is significantly higher than projected at the end of last year or earlier this year. On the domestic side, this positive outlook reflects expectations that growth in domestic demand will benefit, in particular, from ongoing employment growth and higher rates of capacity utilisation.
In theory, lower perceived risk would put downward pressure on the risk premium component of interest rates that New Zealand faces on its external 12 The share of New Zealand’s non-equity liabilities with residual maturity of one year or less declined  from over 50 percent just prior to the GFC to 31 percent in the March 2017 quarter.