The outlook for the New Zealand Economy In the absence of major unanticipated shocks, prospects look promising for continued robust economic growth over the next two years. If this occurs, the current expansion would be the longest in 50 years 17.
Our forecasts suggest that GDP growth will exceed the growth rate of potential output and be driven by continued accommodative monetary policy, population growth, high terms of trade and, in the outer period, by the budgetary stimulus announced in the 2017 Budget. A positive output gap is forecast with inflation gradually approaching the mid-point of the target band.