NZ Economy: Economic Recovery Not Going To Be Pretty
April 12th, 2010
The NZ Institute of Economic Research (NZIER) says the economic recovery will be “bumpy and subdued.” It is picking growth of 2.7% in 2010 and a rather sluggish 1.4% in 2011 calendar years.
The forecaster’s principal economist Shamubeel Eaqub says “the recession is over, but the recovery will be jagged. Some economic indicators – domestically and internationally – are ringing alarm bells. Some housing indicators have suddenly plunged and internationally some confidence and housing figures have also shown renewed weakness.”
He points to uncertainty about regulation and tax as issues which may put the brakes on an economy some were predicting could grow by up to 6% this year. The Institute expects the Reserve Bank to raise interest rates in the September quarter, and unemployment to peak at around 7.5 per cent, similar to the 7.3 per cent rate in December 2009. It warns wage restraint is likely to continue for at least another one maybe two years.
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