The Reserve Bank has backed up the Prime Minister's assessment of the New Zealand economy, saying while it has "moderated" recently, it'll pick up again soon.
In the bank's latest quarterly monetary policy statement, released Thursday morning, Governor Adrian Orr says the official cash rate (OCR) will be staying where it is - 1.75 percent - for much longer than previously predicted.
"We expect to keep the OCR at this level through 2019 and into 2020, longer than we projected in our May statement."
Mr Orr says this will "contribute to maximising sustainable employment, and maintaining low and stable inflation", the latter of which is expected to rise towards 2 percent - perhaps with a one-off bump "global oil prices, a lower exchange rate, and announced petrol excise tax rises".
From there it could go up or down, depending on what happens over the next couple of years. The OCR has been at 1.75 percent since 2016.
"Robust global growth and a lower New Zealand dollar exchange rate will support export earnings," said Mr Orr. "At home, capacity and labour constraints promote business investment, supported by low interest rates. Government spending and investment is also set to rise, while residential construction and household spending remain solid."
While unemployment "roughly around its maximum sustainable level" at 4.5 percent, the Reserve Bank expects it to still "decline modestly" in the coming months.
The Government's defence of the economy followed an ANZ survey showing low confidence amongst business leaders in the economy. Former ANZ chief economist Cameron Bagrie said there was perhaps an element of political bias in the survery, acknowledging those quizzed on their thoughts are more likely to vote National than Labour.
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"I accept that that's how people feel, who fill out the survey," Finance Minister Grant Robertson told The AM Show earlier this week. "What I'm saying is when I talk to businesses around the country, the feeling is quite different from that."
Annual GDP growth is currently around 2.7 percent
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