Treasury says economic jitters in some emerging economies may hamper the export sector, Treasury says.
In its latest set of monthly economic indicators, Treasury says developing nations are being affected by a slowdown in China, and an outflow of money from some emerging countries to rich countries due to the United States Federal Reserve gradually reducing its stimulus measures.
Treasury chief economist Girol Karacaoglu said while New Zealand's economy was set to grow more than 3 percent this year, these overseas events could cause ripples for exporters.
"The more developed part of the world economy is starting to show signs of a slight improvement whereas the emerging markets are the ones under pressure, both because the Chinese economy is slowing down a little bit but also because as the tapering progresses then the money, as it were, is flowing back to the developed economies and putting pressure on the interest rates and currencies of the emerging markets," Mr Karacaoglu said.
"So we are looking at a period of volatility."
That could pose difficulties for exporters to Asia, especially to its emerging markets such as Thailand and the Philippines.
"...so to the extent that the emerging markets come under pressure, then certainly it will have a dampening pressure on our export growth," he said.
The economy was expanding at a faster rate than it could handle without generating inflation, and interest rates appeared set to start rising from a record low of 2.5 percent next month, Mr Karacaoglu said.
