A weakening housing market and the high level of household debt will probably prevent GDP growth in Australia from accelerating above 2.5% in the coming years, while the end of the migration boom may mean that growth in New Zealand slows from 2.9% last year to just 2.0% next year. Against those backdrops, both the RBA and RBNZ will probably raise interest rates later than the financial markets are currently expecting. The RBA may move first in late 2019, with the RBNZ following in mid-2020. This will prevent the Australian and New Zealand dollars from strengthening and may mean that they weaken further this year.
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