New Zealand’s pace of economic activity struck a more moderate (but still respectable) tone in 2017, with the economy navigating some late-cycle headwinds, points out the research team at ANZ.

Key Quotes

“We believe that recent credit developments are an important – and under-appreciated – part of the story too. The slowing in bank deposit growth over 2016 that forced banks to put the brakes on new lending meant that credit conditions exerted a moderate, negative impulse on the economy over the past year or so: the housing market has softened and businesses have found it more difficult to access credit. However, we enter 2018 with that adjustment having broadly played out. Lending and deposit growth are not far apart now, suggesting credit developments will have a broadly neutral impact on activity going forward. This leaves the economy able to continue to record an around-trend pace of growth.”