The National Party has seized on an opinion piece published on the Forbes website that warns of a likely recession under Jacinda Ardern's leadership.

Forbes contributor Jared Dillian, a US-based former Lehman Brothers trader, is critical of the new Government's plans to reform the Reserve Bank, reduce immigration and ban foreign buyers of existing homes.

"Banning foreign ownership of property sets the country up for a possible real estate crash," Dillian writes.

"It seems likely that New Zealand will experience a recession during Ardern's term. Nobody is predicting a return to the bad old days of the 70s, but New Zealand will probably lose its status as one of the most open, free economies of the world.


"It takes decades to weaken an economy, just like it takes decades to strengthen it. But investors will probably want to avoid New Zealand for the time being."

The article has been shared by the National Party on social media.

It is the second recent comment piece published by an overseas media organisation to be critical of the new Labour-led Government.

Earlier this month, Washington Post contributor Ben Mack had a piece published headlined, "How the far right is poisoning New Zealand", claiming NZ First's influence was a "shadow poisoning Middle-earth".

Westpac economists, meanwhile, say the Government will face economic headwinds next year.

Liam Dann reported yesterday the Westpac economists joined a growing list of analysts downgrading the short-term outlook for GDP growth.

But Westpac's long-term forecasts were more positive, with GDP growth revised up for 2019 and 2020.

"The Government's plan to increase spending will certainly boost the economy, although crowding out of the private sector must also be considered," said Westpac chief economist Dominick Stephens.


"Meanwhile, the Government's various plans to cool the housing market and reduce net migration will slow the economy next year."

In its latest quarterly Economic Overview Westpac has revised down its GDP outlook for 2018 to just 2.4 per cent from 2.6 per cent in the previous report.

This follows downward revisions for 2018 from ASB, ANZ, BNZ.

Investment bank Goldman Sachs has also revised up its longer term forecasts - picking Labour's fiscal stimulus will boost the economy in 2018 and 2019.

Last week ANZ's outgoing chief economist Cameron Bagrie said: "The chance of a near-term wobble in growth is increasing."

But he also remained optimistic about the longer term trend.

The central dilemma for economists has been trying to pick the net effect of policies which have both positive and negative impacts on inflation and growth.

The Westpac report divides the Government's new policies into three strands: specified policies with direct impact on the consumer price index, policies that will affect inflation through broader economic conditions and polices yet to be specified but that are in line with it's stated intentions.

Those with direct effects include plans to introduce free tertiary education. Westpac estimated that would knock 0.2 per cent off the CPI in 2018, with a smaller impact in subsequent years as tertiary education's weight in the index shrinks.

That change will outweigh two positive inflation influencers - the Auckland fuel tax and the rise in the minimum wage, the Westpac report said.

The fuel tax would add 0.06 per cent to the CPI but should be offset partly by the removal of the transport levy from rates bills.

The Government plans to raise the minimum wage to $20 an hour by 2021. The first increase next year will add around 0.2 per cent to the Labour Cost Index, although the impact on the CPI is just one third of that.

On a macro-economic level the Government's fiscal spending plans - including $7 billion of additional borrowing over the next four years - is expected to provide a substantial boost to GDP over 2019, Westpac said.

But the spending programme would take some time to "ramp up," the report noted.

But with National's tax cuts cancelled and several policies outlined to dampen the housing market - including a likely tightening of visa requirements for migrants - the combined effect is an inflation forecast that remains below the Reserve Bank's 2 per cent target next year.

The report noted that the health and education were due for a big bump in government spending.

That points to the big change being a rise in the government expenditure as a percentage of consumption in GDP accounts - from 2 per cent to 4 per cent.

Calculating the impact of extra government consumption on GDP - known as the fiscal multiplier - is complex.

For example some of the new spending would go on imports with no contribution to GDP and some on wages which flowed through consumer spending and does boost GDP.

But there was also risk of a "crowding out" effect, Westpac said, where government spending displaced growth in the private sector.

For example the private healthcare sector may see less growth as a result of more public provision.

Any increase in Government debt had to be repaid with taxes, although the report makes the point that new Government policies will still leave New Zealand with low levels of crown debt by international standards.

Westpac concluded that on balance the official cash rate was likely to stay on hold until late 2019 - despite market expectations that it would rise sooner.

"Indeed we think if there were any change to the OCR next year it would more likely be a cut than a hike."