Warm, flat beer rather than champagne for the economy

Keep the champagne - or the Chardon - on ice for a bit. The latest New Zealand Institute of Economic Research survey of economic forecasts show a deteriorating medium term outlook.

The average outlook for the current financial year has taken a dive since the last survey three months ago – down from minus 0.6% GDP growth to minus 1.6% for the year to March 2010.

There is a barely significant improvement in expectations for longer term: GDP is now expected to grow 2.8% in the year to March 2011, up from 2.7% three months ago.

And – no surprise here – economists are a lot less sure than they were that the exchange rate is going to settle down and stop behaving like it has ants in its pants.

The average consensus forecast is for a 6% decline in the 2009/10 year, but the range is wide at -16% to +4%.

The job outlook – with employment being even more of a lagging indicator in this recession than normally – is bleak - consensus forecasts suggest around 60,000 job losses over the next year and subdued wage inflation over the next two years.

Allied to that is a slump in the outlook for private consumption – a decrease of 0.7% is anticipated over the next year, compared to an expected minor increase of 0.1% three months ago.

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NZ Market Snapshot

Forex

Sym Price Change
USD 0.7751 0.0054 0.70%
AUD 0.9497 0.0028 0.30%
EUR 0.6310 0.0071 1.14%
GBP 0.4953 0.0013 0.26%
HKD 6.0120 0.0420 0.70%
JPY 92.1800 0.7250 0.79%

Commods

Commodity Price Change Time
Gold Index 1189.4 -7.590 2014-12-17T00:
Oil Brent 61.2 -2.590 2014-12-17T00:
Oil Nymex 56.8 0.570 2014-12-17T00:
Silver Index 15.9 0.176 2014-12-17T00:

Indices

Symbol Open High Last %
NZX 50 5496.6 5532.8 5496.6 0.40%
NASDAQ 4712.4 4724.6 4644.3 1.23%
DAX 9711.6 9805.3 9544.4 2.69%
DJI 17367.8 17602.9 17356.9 1.42%
FTSE 6336.5 6464.4 6336.5 1.62%
HKSE 22878.3 22935.0 22585.8 1.09%
NI225 17143.0 17274.2 16819.7 2.32%