Analysts at Westpac keep their bearish bias intact for the New Zealand economy while expecting a 2.3% growth rate for 2020 versus previously anticipated 3.1% expansion.

"We expect growth to reach a peak of 2.8% in 2021, as the cocktail of monetary and fiscal stimulus has its greatest impact. Part of the reason for our more cautious near–term outlook is the state of the global economy. The US–China trade war has intensified, and aside from the direct impact of tariffs, the uncertainty generated by the conflict is proving to be toxic for business confidence and investment decisions. Business confidence has been low since the 2017 election, and it has fallen even further in recent months. To date, the labour market has been resilient to the downturn in the business sector, with the unemployment rate falling to an 11–year low of 3.9% in June. However, there are signs that hiring is slowing. We expect that unemployment will push back up to 4.2% by the end of this year. We think it’s only a matter of time before New Zealanders turn their eyes back to the housing market. We’re also expecting a continued spend–up from the Government over the coming years. With the 2020 election coming into sight, we are forecasting that the Government will introduce plans for around $1bn per annum of additional spending at each Budget – a level of spending that we think can be achieved while still running small surpluses, ensuring that it is politically palatable."