NZ Treasury: GDP growth slowed in Q4 2016, but expected to recover over 2017

The Forecasting and Monitoring team in the NZ Treasury published their latest Monthly Economic Indicators March 2017 (MEI) earlier on the day.

Key Points:

GDP growth slowed in the final quarter of 2016 but is expected to recover over 2017 ... However, much of the weakness appears to be due to temporary factors and the growth outlook remains positive

Despite slower real GDP growth, nominal GDP increased strongly as dairy prices rose ... terms of trade rose sharply on higher dairy prices

The current account deficit narrowed to 2.7% of GDP and New Zealand's net international liability position fell to a post-2000 low of 59.9% of GDP ...  Increased spending by overseas visitors to New Zealand also supported national income growth and contributed to a further narrowing of the current account deficit.

Internationally, political developments continued to drive financial market sentiment ... Headline inflation continued to rise in many economies, driven by fuel price movements, although underlying inflation generally remains low and monetary policy remains highly accommodative