NZ economy to show moderate growth
(8 August 2012 – New Zealand) New Zealand Treasury economists have predicted moderate growth, stating the economy is in "relatively good shape" compared with most other advanced economies.
In its latest report on economic indicators, Treasury said business activity indicators suggest 'moderate growth' in coming quarters, despite a further worsening in international conditions.
The first six months of the year showed little domestic impact from the recent global situation, with relatively small falls in confidence and export commodity prices.
However, the global outlook got worse in July 'with downside risks increasing' Treasury said.
'While there was no development which suggested the euro debt crisis will be tipped over the edge, there were few signs of the crisis abating,' Treasury said.
The falls in confidence were relatively contained and dry weather conditions globally will likely put upward pressure on agricultural commodity prices, benefiting New Zealand, Treasury said.
Activity indicators and the main growth drivers have held up well in the face of an uncertain global outlook, pointing to the moderate growth expected at government Budget time.
Tax revenue in the 11 months to May came in slightly above forecast. Inflation, at just 1 percent for the June year, is expected to pick up from late this year.
Tradables goods prices were expected to stop falling and domestic inflation would pick up as spare capacity in the economy was used up, Treasury said.
The first six months of the year showed little domestic impact from the recent global situation, with relatively small falls in confidence and export commodity prices.
However, the global outlook got worse in July 'with downside risks increasing' Treasury said.
'While there was no development which suggested the euro debt crisis will be tipped over the edge, there were few signs of the crisis abating,' Treasury said.
The falls in confidence were relatively contained and dry weather conditions globally will likely put upward pressure on agricultural commodity prices, benefiting New Zealand, Treasury said.
Activity indicators and the main growth drivers have held up well in the face of an uncertain global outlook, pointing to the moderate growth expected at government Budget time.
Tax revenue in the 11 months to May came in slightly above forecast. Inflation, at just 1 percent for the June year, is expected to pick up from late this year.
Tradables goods prices were expected to stop falling and domestic inflation would pick up as spare capacity in the economy was used up, Treasury said.
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