The economy – confronting risks
BusinessNZ Planning Forecast for the 2016 June quarter
New Zealand’s growth outlook is positive but there are risks, according to the BusinessNZPlanning Forecast.
BusinessNZ ChiefExecutive Kirk Hope says nearly all economic indicators are favourable.
“Sectoral data includingmanufacturing, construction, and tourism are strong, and the agriculturalsector is proving resilient in the face of current low prices.
“Net migration isstill driving demand and is good for growth, but also brings risks that must bemanaged,” Mr Hope said.
“It is thereforepleasing to see the Government seeking to address regulatory issues that areholding back growth, such as land supply for housing and businessdevelopment.
“Regulatory reformshould be robust enough to provide certainty for business to invest.”
Mr Hope said a keyrisk factor in the economy was high levels of household and farm debt, creatingsome vulnerability to a correction in asset prices or rise in interest rates.
The BusinessNZPlanning Forecast incorporates BusinessNZ’s Economic Conditions Index (ECI)which tracks 33 economic indicators including GDP, export volumes, commodityprices, inflation, debt and business and consumer confidence.
The BusinessNZPlanning Forecast for the June 2016 quarter sits at 7, up 8 on the previousquarter and up 4 on a year ago.