Official and unofficial data show the New Zealand economy is growing slowly.
While even slow growth is a positive given current global economic settings, New Zealand does face some risks in meeting economic forecasts outlined in the recent Budget, according to the BusinessNZ Planning Forecast for the June quarter 2012.
Declining international commodity prices and declining confidence in the rural sector, poor consumer confidence and low investment levels by business are among the risk factors for the New Zealand economy.
But there are also positives. A focus on debt reduction by businesses and households is good in the light of New Zealand’s vulnerability to changes in international investor sentiment; interest rates remain at historic lows, assisting with debt reduction; and inflationary pressures remain firmly in check.
The BusinessNZ Planning 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 ECI sits at 6 for the June quarter, up 2 from the previous quarter and down 7 on a year ago.
The BusinessNZ Planning Forecast for the June 2012 quarter is at www.businessnz.org.nz