ASB has injected a sombre tone into its latest quarterly economic forecast, warning the slow down in growth hasn't finished yet and calling for the Government to do more to boost confidence.

In a report released this morning ASB chief economist Nick Tuffley highlights lackluster per capita GDP growth - which he says will struggle to stay in positive territory as top line growth slides below two per cent per annum in the first quarter of 2020.

"Growth can and should be stronger, Tuffley said. "There is an increased role for Government to both directly boost demand and also to help reduce the amount of uncertainty and caution that is holding businesses back."

ASB's forecasts now see annual GDP growth dipping to 1.9 per cent for the year to March 2020 and remains subdued with a lift to just 2.1 per cent for the year to March 2021.

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The outlook contrasts with a more upbeat assessment by Westpac economists last week, which suggested we may have already reached the bottom of the slide in GDP growth.

ASB's downbeat assessment now puts it near the bottom of the consensus range of economists.

A Bloomberg poll of economists in late October had the consensus picking an earlier GDP rebound in 2020 and higher growth through the year.

Tuffley warned there were external risks to the local economy if global growth slowed further.

Last week the OECD downgraded its forecast for global growth to just 2.9 per cent in 2020.

It's not all grim.

Tuffley acknowledged some "green shoots" and notes that monetary policy ( with record low interest rates) is stimulating economic demand.

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New Zealand exports have thus far been largely unaffected by slowing international growth and look to have strengthened in 2019.

He noted the uptick in the housing market and ongoing strength of the labour market.

Nick Truffley noted the uptick in the housing market. Photo / File
Nick Truffley noted the uptick in the housing market. Photo / File

But he warned that credit conditions will likely stay tight in 2020 - particularly in light of the Reserve Bank's proposed lift in capital requirements for the retail banks.

On that basis there was a case for both more fiscal stimulus from Government and greater efforts to provide business with policy certainty.

"It would be great to see the Government come up with some innovative ways to jolt businesses into acting," Tuffley said.

Allowing a short window of "accelerated depreciation on new capital spending" might be a way to encourage businesses to invest, he said.

That would allow businesses to more aggressively offset their tax bills against new investment.

Tax cuts were another option to lift after-tax returns from businesses.

"Above all, helping reduce the amount of uncertainty and angst businesses are feeling – regardless of the cause – would help," Tuffley said.

"Engaging heavily in two-way dialogue with industries, showing pragmatism, understanding, and a clear commitment to support industries through transitions may give greater comfort."

Government needed to get key policies finalised as soon as possible, he said.

Last week at a Trans-Tasman Business Association breakfast Prime Minister Jacinda Ardern urged business leaders not to confuse change with uncertainty.

She committed to providing a clear policy agenda but said sticking with the status quo was not an option.