NZ: Ring the changes - ANZ

Phil Borkin, Senior Economist at ANZ, notes that in New Zealand, Labour and NZ First have announced their intention to enter a formal coalition, with support from the Greens on confidence and supply.

Key Quotes

“Crucially, many policy details are still lacking, but they should become clearer over the coming days.”

“This announcement does create some additional uncertainty compared with the more status quo alternative, at a time when the economy was already facing some growth headwinds. However, that needs to be weighed against the prospects of fiscal policy set to turn more expansionary.”

“While the NZD has initially weakened on today’s announcement, whether this move extends will depend critically on policy details that we don’t yet have.”

“Once these details are known, we will assess whether any changes to our economic forecasts are necessary.”