WELLINGTON (Reuters) - New Zealand's economy is expected to have lost momentum in the third quarter after surprising strength in the previous quarter, partly as consumers were hit by sharp rises in petrol prices.
A combination of international trade frictions, low business confidence, a subdued housing market and easing migration have raised risks to the growth outlook for New Zealand.
Ten economists polled by Reuters on average expected quarter-on-quarter gross domestic product (GDP) growth of 0.6 percent in the three months to the end of September, coming off a surprise 1 percent recorded in the previous quarter, bringing annual growth to 2.8 percent.
Statistics New Zealand is due to release the figures on Thursday at 1045 local time (2245 Wednesday GMT).
Four of the economists polled expected growth of 0.5 percent while four others predicted 0.6 percent, and the remaining two analysts put the number at 0.7 percent and one percent respectively.
While global crude prices tumbled recently, New Zealand pump prices saw a sharp rise in the third quarter as fuel retailers adjusted to oil increases seen earlier.
"The sharp increase in petrol prices squeezed household budgets and appears to have directly impacted broader economic activity," said Jane Turner, senior economist at ASB.
ANZ said the GDP figures for the quarter has an element of pay back from the strong second quarter, where a number of temporary factors like a weather-related recovery in milk production and above-average hydro lake levels provided a boost.
"But underlying momentum in the economy is expected to be stable and should put a floor under Q3’s deceleration," said Sharon Gollner, AZ's Chief Economist.
Like several other economies, New Zealand is also facing rising risks to growth from the trade war between its major trading partners the United States and China.
The trade frictions and subdued inflation at home have prompted the Reserve Bank of New Zealand to maintain an accommodative policy stance, with the benchmark rate held at a record-low 1.75 percent since late 2016.
New Zealand's Treasury department last week trimmed the country's growth forecast for 2019 and flagged a smaller surplus as it cautioned of risks to the economy from global trade frictions and slowing immigration.
Business confidence sank to 10-year lows earlier this year, partly due firms' opposition to policies of Prime Minister Jacinda Arden's labour-led coalition government.
Ardern's government has hiked minimum wages, restricted foreign homebuilding and looked to curb immigration.
(Reporting by Praveen Menon; editing by Shri Navaratnam)
