NZ economy – two steps forward, one step back

New Zealand’s economic prospects are improving despite some risks, according to the BusinessNZ Planning Forecast for the December quarter 2010.

While international markets are still volatile, underpinned by concern about sovereign debt levels, New Zealand’s major trading partners continue to show solid growth prospects - good news for New Zealand commodity producers.

Recent adverse events such as a significant loss of lambs over spring will have some impact on growth prospects, while the Government’s accounts have come under some pressure as a result of one-off bailouts.

Standard and Poor’s decision to put New Zealand foreign currency rating on negative outlook stresses the need for the government to get expenditure under control, even if this means making some unpalatable decisions.

The Forecast incorporates BusinessNZ’s Economic Conditions Index (ECI) which tracks 33 indicators, including GDP, export volumes, commodity prices and inflation, debt and confidence figures.

The BusinessNZ Planning Forecast for the December quarter 2010 is here on www.businessnz.org.nz