Investing Decisions: Batten Down For More Tough Times
November 11th, 2009
The Productive Economy Council is predicting more tough times for the NZ economy, not the end of recession. It says prior to the recession 30% of our GDP was from the export sector and this 30% is still very much in recession.
The Council says how can we borrow $250m a week to stimulate consumer and housing spending, thereby lifting the exchange rates and putting further pressure on the remaining exporters and then turn around and claim we have a sustainable recovery? The Govt can pump as much money as they like into the internal economy but it won’t earn a cent towards paying it back.
Federated Farmers has already come out and warned the government that the choice is either a short dose of reality now or the abyss when the economy inevitably crashes into a ‘W’ shaped recession, with spokesman Philip York saying: “If the Govt believes its own rhetoric of an export led recovery then some hard decisions are needed immediately.”
The PEC says Bill English can talk up the economy all he likes but the reality is our real income as a country is export earnings and this income is plummeting. Even worse, the means of production and income generation are no longer being invested in due to the uncertainty of the returns.
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