Recovery interrupted - Quarterly Predictions, March 2011

01 March 2011

Barely any growth in 2011

“The recovery has been deferred. We have revised down our 2011 growth forecast from 2.3% to 0.3%. Around half of this revision is from underlying weakness in the economy, which will be compounded by a synchronised spike in food and fuel prices. The other half is due to the devastating earthquake in Canterbury” NZIER’s Principal Economist Shamubeel Eaqub said.

We expect the RBNZ to hold the OCR unchanged at 3% through 2011. There may be a need for rate cuts, but the RBNZ should fully assess the economic fallout before doing so.

The details are in NZIER’s March 2011 Quarterly Predictions – a comprehensive and independent commentary on the New Zealand economy and forecasts covering the next five years. Details and insights are available exclusively to NZIER members.

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