Ratings agency Fitch has cut its outlook for the NZ economy for positive to stable while keeping its rating at AA.

Fitch Ratings has reined in its expectation for New Zealand's economic growth this year.

The global rating agency affirmed New Zealand's long-term foreign currency issuer default rating at AA, while reducing the outlook to stable from positive.

"Fitch has revised down its assessment of New Zealand's near-term growth prospects as the outlooks for the prices of the country's agricultural exports have deteriorated," analyst Mervyn Tang said.

Fitch said the weak dairy prices are weighing on the nation's banking sector as a whole, and its negative outlook for lenders reflects the potential deterioration in asset prices.

"Delinquent loans have remained low so far as banks have supported farmers deemed to be viable," Mr Tang said. "However, a prolonged period of low dairy prices could lead to a rise of non-performing loans from the sector, as well as sharper cutbacks in production and investment."

Source: NZCity