New Zealand's robust economy may experience a more moderate slowdown in the second half of the year than initially forecast, helped by strong world prices for commodity exports, the Treasury said on Monday.
In its economic indicators report for July, the Treasury said the level of economic activity over the first half of 2004 would be stronger than forecast after gross domestic product grew by 2.3 percent in the first quarter.
The rate of quarterly growth was still expected to slow over the year ahead, it said in the report on its website (www.treasury.govt.nz).
"However, there may be sufficient momentum in the domestic economy, coupled with a slightly stronger performance by the external sector, to suggest that the slowdown in the second half of 2004 may be more moderate than initially forecast," it said.
"A major factor contributing to this is the strength of world prices of New Zealand's commodity exports, while the high level of consumer confidence and improving business confidence are also positive for future growth prospects."
The Treasury has forecast gross domestic product to be 2.8 percent higher in the year to March 2005, falling to 2.5 percent the year after, before rising to 3.4 percent in 2007.
New Zealand's economy, one of the world's fastest growing in the past three years, has so far defied expectations that a strong currency, falling migrant numbers and higher interest rates would slow growth.