Longer, slower recovery, say economists
The weaker growth will also mean the government's expectations of returning to surplus by 2014/15 year will be under pressure.
The economic recovery is now expected to be longer and slower than was thought.
The latest New Zealand Institute of Economic Research set of consensus forecasts now has the economy growing, slowly, growth GDP reach 2.2% for the year to March 2012 and then rising to 3% the following year.
This is below earlier forecasts, which were, respectively, 2.6% and 3.7%.
"A darkening global economic outlook and a later rebuild in Canterbury were the two key drivers of a weaker economic outlook," says the institute in its latest compilation of forecasts of economists who follow the New Zealand economy.
The high New Zealand dollar's impact on export earnings is also cited as a factor, although expectations for the current year are reasonably good. It is the next year, with a comparatively high currency and weaker global economic growth, where the drop is expected to come.
" Exports will grow solidly in the March 2012 year (2.7% from 3.2%), slow in 2013 (1.6% from 2.8%) and then rebound in 2014 (3.1% from 3.3%)."
"A weaker economy and subdued inflation mean economists now expect the RBNZ to raise interest rates later and more gradually."
The weaker growth will also mean the government's expectations of returning to surplus by 2014/15 year will be under pressure.
Economists are not - yet – suggesting this target is unlikely: the previous set of forecasts actually had the government getting back into surplus a year before that.
"The fiscal balance will improve from a $12 billion deficit in the June 2012 year, but remain in a $1 billion deficit in 2014," said today's survey.
In the September 2011 survey economists had expected a surplus of $1 billion by 2014.
Rob Hosking
Mon, 12 Dec 2011
Mon, 12 Dec 2011
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Longer, slower recovery, say economists
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