NZ: Current account shaves down GDP forecasts - TDS

Sandeep Kanihama FXStreet Contributor

Annette Beacher, Chief Asia-Pacific macro strategist at TD Securities, explains that the New Zealand’s outcome for the Sep qtr deficit was -3.6% of GDP as per expectations but it resulted in lowering their Sep qtr GDP forecast from 1% to +0.7%/q.

Key Quotes

“Two Sep qtr trade reports claimed that exports (nominal, sa) increased by ~6%/q (Sep monthly trade +6.3%/q and Sep qtr terms of trade (ToT) +6.0%/q). Naturally we penciled in +6%/q for the current account, but the outcome was +2.7%/q, less than half. A slump in services (-3.1%/q) was the difference, the weakest quarterly print in five years.”

“So for tomorrow's Sep qtr GDP report, now that the trade contribution is closer to +0.6%pts, we look for +0.7%/q for GDP (before today we were the outlier at +1%/q). However, 3% annual GDP growth is nothing to worry about, and after yesterday's pickup in business confidence and own activity, perhaps the RBNZ can have a merrier Christmas.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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