While GDP growth in both Australia and New Zealand in the first quarter was weaker than most had anticipated, this was partly the result of temporary factors that will fade. Nonetheless, while the outlook for activity in New Zealand is promising, we remain concerned about growth prospects in Australia. In particular, a struggling household sector and declining support from dwellings investment means that real GDP growth may well slow from 2.5% in 2016 to around 2.2% in 2017.
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