NZ Economy: NZ Recovery Will Gain Pace In 2010
January 22nd, 2010
JP Morgan has some good news for business as we go into 2010. It says:
• Expansion will quicken in 2010 as exports lead economy out of recession
• Improved confidence will buoy consumer and business spending
• RBNZ policy tightening to begin in March; OCR to reach 4% by end-2010
JP Morgan economists say in the second quarter of last year the NZ economy emerged from a prolonged recession which extended for five painful quarters, the worst outcome on record. It is now forecasting real GDP shrank 1.6% in 2009, but on a positive note it expects the economy to gain momentum during 2010 to post full-year growth of 2.4%.
It says the continued recovery will owe much to firmer exports, due to stronger trading partner growth and higher international commodity prices, which will boost national income. The dominant risk comes from offshore. An unexpectedly soft global recovery - and it is forecasting above-consensus global GDP growth of 3.4% in 2010 - will dampen NZ prospects.
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