Housing, China's slowdown could trip up NZ economy

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WELLINGTON -- The International Monetary Fund said New Zealand's economy is stronger, but warned the Auckland housing market and a sharp slowdown in China could still pose a threat to its growth.

In its annual stocktake, the organization said the New Zealand economy's prospects have improved because of the rebuilding of Christchurch and high global commodity prices.

It predicts growth will be about 3.5 percent this year.

While house price growth has eased slightly due to lending restrictions, the IMF said it could still damage the financial system if there's an economic shock.

The IMF also said a slowdown in China could hurt the economy, though it doesn't believe that's imminent.

The organization has endorsed the New Zealnd government's debt- reduction plan to ensure the country is in good shape to withstand any nasty shocks in the future, Radio New Zealand reported on Tuesday.