A closely watched measure of consumer sentiment in New Zealand declined in the first quarter, Westpac reported Monday.
The Westpac consumer confidence index slipped 1.2 points to 111.9 in the March quarter, after climbing 5.1 points in the final quarter of 2016. The indicator has been on a general downtrend since early 2014.
A reading above 100 indicates optimists outweigh pessimists.
Westpac’s quarterly survey tracks consumer optimism in New Zealand’s economy, including views on personal finances and economic expectations. These factors are seen impacting consumer spending, which is a key driver of the domestic economy.
New Zealand’s robust economy softened in the fourth quarter, as seasonal factors led to a slower than expected rise in total output. The overall economy expanded 0.4% on the quarter and 2.7% annually, missing forecasts.
Household consumption contributed positively to growth, helping to offset declining exports.
Disappointing growth poured cold water on expectations the Reserve Bank of New Zealand (RBNZ) would consider raising interest rates this year. Investors are still pricing one quarter-point rate hike over the next 12 months, as New Zealand is set to become one of the fastest growing advanced economies.
The Reserve Bank will hold its next policy meeting on Friday.
Wellington reported a current account deficit of NZD $2.34 billion in the fourth quarter, the smallest in two years, as tourist dollars poured into the country. Tourism has emerged as one of New Zealand’s most vibrant sectors.
In terms of upcoming data releases, the federal statistics agency will report on February visitor arrivals on Tuesday. Trade data for the month of February will also be presented on Friday.