New Zealand likely to avoid significant US tariff impacts

A new report suggests that New Zealand may not be heavily affected by US tariffs aimed at the Asia-Pacific region. S&P Global Ratings, a leading credit agency, believes that while many countries in the region will face challenges, New Zealand's impact will be minimal. Louis Kuijs, the chief economist at S&P Asia-Pacific, stated that the region has a degree of resilience. He noted that domestic demand in countries like New Zealand, Australia, and Indonesia might offset any decline in exports due to US tariffs. These countries generally have low import tariffs and do not have significant trade surpluses with the U.S. However, all countries in the Asia-Pacific will likely feel some indirect effects from the tariffs. Slower global growth, caused by trade tensions, is expected to impact exports across the region. While China faces significant tariffs, Kuijs believes its economy is better equipped to handle them, thanks to strong government support for domestic demand. S&P has revised its growth forecasts for many economies in the region. New Zealand, in particular, is projected to see slow growth. The report estimates a 1.5 percent growth rate for this year, increasing to 2.3 percent in the following three years. Inflation is expected to stay around the Reserve Bank's target of 2 percent, with interest rates likely dropping to 3 percent this year.