Reportedly, New Zealand’s GDP (gross domestic product) is anticipated to have declined by 0.4% quarterly in the 3 Months to June, according to Reuters’ poll, strengthening the case for a further spur from the central bank in spite of a solid interest rate cut in August. The mean projection from 12 economists surveyed by Reuters put yearly growth at 2% in the June quarter—which is its lowest since 2013—and quite below 2.5% that was reported in the March quarter. The statistics came on the back of a sequence of negative news in New Zealand, with business and consumer sentiment at record lows, with the country conveying concern over the impact of the global trade tensions, which are a slowing Chinese financial system and Brexit.
In a note, ANZ Bank said that the demoted growth prospect for the remaining year and dropping inflation aspirations will make the RBNZ (Reserve Bank of New Zealand) conclude that it can’t have adequate money to be patient for quite long. Sharon Zollner—ANZ’s Chief Economist—said, “The challenge is that the RBNZ requires the economy to run hot, not in the category of spluttering fashion we anticipate.” ANZ anticipates the OCR (official cash rate) to be reduced to a record low of 0.25% by May next year.
Speaking of New Zealand’s economy, the administration is supporting research by providing funds to advance low emission economy. Megan Woods—New Zealand’s Research, Science and Innovation Minister—stated that the government is spending approximately 241 million New Zealand dollars in major research proposals to tackle New Zealand’s social problems. The project would assist in finding new methods to deal with long-term problems such as growing knowledge-intensive industries and increasing sources of renewable energy. The Endeavour Fund picks exceptional research projects openly, which will present the highest impending impacts across a range of environmental, economic, and societal objectives.