The New Zealand economy is expected to have grown by less than previously estimated this financial year on account of the ongoing global trade tensions, especially the trade war between the US and China. In addition, the NZ Treasury Department has also revised its forecast for budget deficit, from NZD 1.3 billion to NZD 0.9 billion.

New Zealand has trimmed its economic growth forecast from 3.2% to 2.3% on the back of heightened external risks such as the trade war and Brexit. According to finance minister Grant Robertson, “A small deficit in the current year is not surprising, given the impacts global headwinds are having on confidence here.”

However, Robertson remains optimistic that the NZ economy continues to outperform its peers despite the effect of these risks. The NZD remained supported despite the downward revision after Robertson announced government’s plans to invest NZD 12 billion on infrastructure development – the highest capital spending seen in over 20 years.

At the time of writing, NZD/USD is trading at around 0.653