National Economic Outlook

The recovery in economic momentum has again been upset by global conditions, with heightened uncertainty following a renewed surge in global oil prices and the flow-on effects to inflation, coupled with rising interest rates. Our forecasts incorporate this more uncertain and cautious outlook, and we have lowered our near-term economic expectations. Household consumption and business investment are likely to be more restrained in the year ahead, as households and businesses both weigh up global trends and higher interest rates. Consumer and business confidence remains solid, and our forecasts are for growth to continue – just at a more restrained pace than we had forecast in July, when the effects of the Middle East conflict appeared much more temporary.