3 Nov 2016

Trump would be 'horrible' for NZ economy - NZIER

11:29 am on 3 November 2016

The Institute of Economic Research says it will be horrible for the New Zealand economy if Donald Trump wins the United States presidential election.

Republican presidential candidate Donald Trump attends the Republican Hindu Coalition's Humanity United Against Terror Charity event..

Photo: AFP

The economic think tank has added its voice to growing concerns about what a Trump presidency would mean for the economy, after ASB Bank said growth in New Zealand could get "trumpled".

The institute said a Trump presidency would have a significant negative effect on the US economy and a destabilising impact on New Zealand businesses.

Its concerns echo those raised by 370 economists, who have signed an open letter to voters in the United States urging them not to vote for Mr Trump.

Institute deputy chief executive John Ballingall said a Trump win would likely generate instability in financial markets, while Mr Trump's trade policies would have a destabilising impact on global trade, with long-term impacts for New Zealand.

"The New Zealand dollar could appreciate against the greenback in the short term if markets are concerned about future US competitiveness, although this might be offset by traders moving away from more peripheral currencies," he said.

New Zealand exporters could be impacted as well, Mr Ballingall said.

"One estimate is that Trump's policies will see 4.8 million job losses," he said.

"A weaker US economy will have a negative impact on the $8.4 billion of goods and services we sell to the US. This will be of particular concern to the meat, dairy, wine, wood and tourism sectors."

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