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ANZ Raises Q1 GDP Growth Forecast for New Zealand

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New Zealand's economy is now expected to grow 1% sequentially in the first quarter, ANZ said in a Wednesday report as it raised its 0.9% preliminary growth forecast.

The quarterly gross domestic product figures are due for release on June 18. If the growth is in line with ANZ's forecast, it will boost the prospects for an interest rate hike in July, the bank said.

It appears that the economy was gaining momentum before fuel prices surged due to the Middle East conflict. While data suggests the momentum has slowed since the first quarter, it looks "more like a stall than an abrupt contraction at this stage," the bank said.

"Industries exposed to tourism, agriculture, and discretionary spending are likely to show the most growth, though construction likely went backwards, based on the work put in place data," ANZ said.

The bank expects New Zealand's annual current account deficit to be unchanged at 3.7% of GDP.

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