Winter is coming! Undead dragons, endless night, frost giants, 2 per cent GDP growth, low house-sale volumes ... brace yourself.

Game of Thrones fans will see what I did there – mixing pop culture and economics for dramatic effect.

My point is that New Zealanders have habit of getting overly gloomy in the winter months when in fact things are never as bad as a fictional medieval kingdom during a period of total war.


Serious GOT fans hoping for deeper economic analysis of the post-war reconstruction of Kings Landing will have to look elsewhere.

Ok, spoiler alert.

The Iron Bank will be fine, its can safely write-off its loans to the Lannister regime because its capital ratios are set to withstand a once-in-2000-years event.

Based on current projections, New Zealand should be fine too.

It is true that economic growth is slowing.

I don't want to be dismissive of that because of the real pressure that it puts on businesses and workers.

The direction of travel matters.

But there is a broad consensus among economists that this slowdown is transitional.

The forecasts for where we will bottom out range from around 2.5 per cent GDP growth to 2 per cent.

Either way, that is not terrible.

In quarterly economic forecasts, published Friday, ASB economists pick that we will hit bottom at 2.2 per cent in June and then bounce back to 2.9 per cent at the end of the year.

If this is a transition from one economic cycle to the next, then it's the most orderly one I've seen in my lifetime.

There are a couple of caveats of course.

Focus: Finance Minister Grant Robertson outlining the three fundamental elements to the Govt's wellbeing plan.

Something calamitous could happen - a Wall Street meltdown or a Chinese credit crisis.

That kind of risk is always in the background and out of our control.

If we look at the data actually underpinning this economy right now it is still strong.

New Zealand export returns remain at historical high levels across all our main commodities - dairy, meat and wood.

If they can hold much longer then New Zealand's Terms of Trade may touch record highs over 2019, ASB notes in its forecast.

An export-led recovery is traditionally the best way out of a downturn for New Zealand and - despite the ongoing trade war tensions - the signs look good.

Tourism growth has flattened but remains at elevated levels.

Latest projections from the Trenz industry conference predict solid annual growth of four per cent growth through to 2025.

Net migration gains are also holding up - with the population growing by between 50,000 and 60,000 a year.

Domestically, the dark spots are the housing market and business confidence.

Yet, it wouldn't take much to see either of those turn into positive territory.

Both are likely to be buoyed by the Reserve Bank interest-rate cuts and by the spectre of a capital gains tax having ben ruled out.

The housing slowdown is still gathering pace and it's hard to overplay its influence on the Kiwi psyche.

House sales are a regular victim of the winter gloom.

The same could perhaps be said of business confidence, caught in the icy political blast of a center-left government.

But let's not forget that the more tangible business concerns are to do with labour shortages.

These are capacity constraints caused in part by low unemployment - problematic but preferable to the reverse.

And the housing slowdown was largely engineered by Reserve Bank and government policies, due to public concern about affordability and rising debt, after a long period of strong growth.

Ok, so why does it still feel grim?

Given how strong the economic indicators are, shouldn't we be doing better?

The more acute risk is that we are currently suffering a unique structural decline - mired in low productivity, low wage growth and destined for some kind of Japan-style stagnation.

Our Government is attempting to tackle some of this issues with its wellbeing Budget and Future of Work commission.

That will be slow going.

Globally, many economists are now making a strong case for more radical solutions.

This government has stated clearly that it is prepared to forego some points of GDP growth in order to transition to a more sustainable economic path.

Finance Minister Grant Robertson. Photo / Mark Mitchell
Finance Minister Grant Robertson. Photo / Mark Mitchell

But Finance Minister Grant Robertson has also made it very clear, with his commitment to fiscal responsibility, that this government is about evolution not revolution.

Meanwhile, it seems likely that we'll continue to turn through short-term economic cycles, albeit with lower growth, lower inflation and lower interest rates.

That's a reality Robertson still needs to address in his Budget this month - along with loftier goals.

With neither the fiscal headroom, nor the inclination, to spend up and stimulate the economy through this trough, he faces a tough sell.

Perversely, Bill English had the advantage of an earthquake and a GFC to point to when he made his case for economic stoicism.

Robertson just has slowing global growth and grumpy business leaders.

So while the issues aren't as bad, they are less tangible for a public that is impatient for pay rises and a sense of economic momentum.

The acid is now on the finance minister to inject a sense of coherence and vision to the Government's cautious and, sometimes, bumbling reforms.

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