'Black clouds' on horizon for NZ economy

'Black clouds' on horizon for NZ economy
Photo credit: The AM Show

A chief economist says Kiwis need to "chill" over the "potential doom and gloom" a changed Government could bring to our economy.

As NZ First leader Winston Peters announced he would go into a coalition with Labour on Thursday evening, he said there were "dark days ahead" both on the international horizon and here.

"Things aren't as good as you think," he said.

But Business and Economic Research Limited chief economist Dr Ganesh Nana told The AM Show the black clouds on the horizon have been there "for quite a while".

"Ten years after the global financial crisis, world balance sheets are still in a bit of a mess.

"We've managed to keep it at bay but I think it's coming."

Dr Nana says there is likely to be an economic downturn regardless of who is in Government.

"It's not going to be scarily bad but it's going to be an adjustment and this is the play that we have to be aware of.

"We probably have to tell the finance markets to chill a little bit, take their morning medication and just realise that the sun still will rise in the east and set in the west.

"Life goes on. There will be changes, there will be losers... we have to just get on with it basically."

New Prime Minister Jacinda Ardern told The AM Show it's only fair that Mr Peters warned of "signs of a slowdown" for the economy.

Ms Ardern says while it is the Government's job to manage international economic factors, "you can't control what you face".

"We will potentially have a rocky road in front of us. But the goal of this government needs to be an economy that delivers for everyone."