Q3 GDP growth printed stronger than expected, lifting 1.1% vs market and our own expectations of a 0.8% lift. However, this 'positive surprise' was offset by downward revisions to history. This leaves annual growth at 3.5% - in line where we expected but slightly softer than market and RBNZ expectations.
In particular, the lift in growth over the first half of the year wasn’t nearly as impressive as previously thought. This has implications for the extent the RBNZ can hope for domestically-sourced inflation to lift over the coming year. It argues for the RBNZ to remain patient for inflation pressures to lift off lows. But does not change our OCR outlook, we continue to expect the RBNZ to leave the OCR on hold at 1.75% for the foreseeable future.