Heightened caution weighs on growth outlook - Quarterly Predictions, June 2024

Households and businesses are feeling more cautious in the face of higher interest rates and uncertainty about the new Government’s priorities regarding spending and public sector cutbacks. Heightened uncertainty about the outlook has unwound the post-election rebound in confidence and activity towards the end of 2023. Soft demand is now the dominant feature of the New Zealand economy, in contrast to the severe supply constraints which had been the key concern for firms over the COVID-19 pandemic.