Although the economy grew strongly over the first half of this year, that growth was still overly dependent on the heavily indebted household sector. That arrangement was possible when interest rates were near record lows and house prices were rising rapidly. But with interest rates now rising and the housing boom at an end, we fear that economic growth will fade. Even after allowing for stronger export growth, we expect real GDP growth to slow from 3.0% in 2017 to 1.5% in 2018.
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