Last year was marred by economic disappointment. During the first half of 2016, growth proved to be frustratingly slow, despite strong population growth.
Much to the Reserve Bank's frustration, inflation remained weak and the central bank was forced to cut the official cash rate 0.75% - something it had not expected to do at the end of 2015, he said.
''But now the groundwork has been laid for the New Zealand economy to shift back into high gear.''
A tourism boom had the retail sector humming. The labour market had tightened, New Zealand households felt more confident and dairy prices had turned around.
Global dairy prices had outperformed the ASB's own upbeat expectations - so much so, the bank had revised its 2016-17 Fonterra milk price forecast even higher to $6.50 per kg of milk solids from $6, Mr Tuffley said.
This year should be a good one for New Zealand, assuming the rest of the world also held it together.
There were many uncertainties on the global outlook and United States president-elect Donald Trump was the largest unknown. The key risk was if Mr Trump's administration followed through with anti-trade rhetoric from the election campaign and imposed stifling import tariffs on China, he said.
The end of 2016 was a busy one for the New Zealand data calendar. Just a few days before Christmas, Statistics New Zealand released third-quarter GDP figures. Third-quarter growth proved stronger than expected but that positive surprise was diminished by growth over the first half of the year being revised lower.
While cumulative growth over the previous 12 months might not have been as spectacular as hoped, it was solid nonetheless. More importantly, the ASB expected growth to remain above 3% - and above trend - for 2017, Mr Tuffley said.
As New Zealand growth ''revved up'', inflation trends were also expected to improve. The Reserve Bank was most likely done with cutting the official cash rate - again assuming optimistically no big global disruption hit in 2017.
Combined with a sharp shift for the US growth and inflation outlook, New Zealand and international interest rates had lifted sharply in a short time. New Zealand interest rates did remain ''relatively low'' but borrowers needed to brace for higher interest rates in coming years, he said.
Meanwhile, savers could finally breathe a sigh of relief as nominal yields continue to improve over the coming year.
''All going well, 2017 should be a prosperous year for New Zealand. But, as always, being a small open economy which is subjected to the whim of global sentiment, we need to also prepare for the unexpected.''
