Saturday, December 31, 2011

Reserve Bank's forecasts discouraging

"Worsening global economic conditions have led the Reserve Bank [to] shave nearly 1% off its growth forecasts for the next three years," Rob Hosking reported in The National Business Review of December 8.

"GDP growth is now expected to total 8.3% over the next three years: back in September the Reserve Bank's forecast was for 9.1%. Volatility from the Eurozone and a 'modest' downturn in the hitherto booming Asia-Pacific export markets are all cited as reasons for a more restrained growth path.

"A 'soft' domestic economy is the other main reason.

"Several factors are driving this: the almost daily news diet of economic crises in the north Atlantic economies is having an effect on consumer and — to a lesser extent, surprisingly — business sentiment. The noises of financial panic from offshore will also have a more tangible impact on retail interest rates."

The cartoon is from the Manawatu Standard of December 17, 2011.


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