27 Jan 2016

Fitch flags slightly weaker growth prospects

8:59 am on 27 January 2016

Ratings agency Fitch has highlighted weaker prices for New Zealand's agriculture exports - including dairy - for its revised outlook on growth.

It has left the country's sovereign rating unchanged at AA, but had revised-down its assessment of New Zealand's near-term growth prospects because it said the outlook for prices of the country's agricultural exports had deteriorated.

Fitch ratings agency has revised its outlook for growth in New Zealand.

Fitch ratings agency has revised its outlook for growth in New Zealand. Photo: 123 RF

Fitch expected economic growth to pick up to 2.4 percent this year, and to 2.6 percent in 2017, a slower pace than earlier forecast.

It expected a slight rebound in business investment and further growth in migration to support consumption growth, though that may be offset by weaker dairy production.

ANZ chief economist Cameron Bagrie told Morning Report it was not a negative forecast, but it was less positive.

"There's just a lot more economic uncertainty and ratings agencies, bank forecasts everybody is noticing there's some upside risks across the general economy but there's an awful lot of downside risks out there as well - so the outlook's a little bit more balanced."

Mr Bagrie said the agency was still forecasting growth this year for the country of 2.4 percent.

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