New Zealand Economy Will See Slow Recovery, Says Think Tank
2011-08-31 14:35:30
New Zealand's economy will continue to recover in the coming years, but growth will remain sluggish, the New Zealand Institute of Economic Research (NZIER) said Wednesday. The Institute also urged the Reserve Bank to keep the rates on hold for some time.
In its quarterly economic outlook, the think tank said it sees 1.4 percent growth for the economy this calendar year and 2.6 percent for 2012. According to the institute, this is consistent with a slow and gradual economic recovery, with continued deleveraging.
"The New Zealand economy is on the mend, but weak global growth is threatening this recovery," NZIER's Principal Economist Shamubeel Eaqub said. An abrupt slowdown in the Australian economy, renewed recession fears in the U.S. and a spreading sovereign debt crisis in Europe will soften global growth, Eaqub added.
The institute urged the Reserve Bank of New Zealand not to raise interest rates while the global economy is so vulnerable and the currency is so high. "We now expect the RBNZ to raise interest rates from June 2012 compared to March 2012 forecast previously," the economist said.