The Canterbury rebuild, low borrowing costs, and ongoing demand and strong prices for New Zealand’s primary exports will all help support economic growth in the medium term
Dubai (PRWEB) February 13, 2013
The New Zealand Institute of Economic Research (NZIER) recently forecast that the country’s economy is forecast to log annual growth of 2.5% over the next three years. Secretary to the Treasury Gabriel Makhlouf says the Treasury is forecasting the pace of GDP growth to strengthen throughout 2013, but cautions that growth will be uneven and variable across sectors and regions. "The Canterbury rebuild, low borrowing costs, and ongoing demand and strong prices for New Zealand’s primary exports will all help support economic growth in the medium term," Mr Makhlouf said. The economy is currently estimated to expand 2.3 percent in the year ended March 2013, slower than 2.4 percent forecast earlier.
Hamed Mokhtar, Managing Director of Fortress Financial says “Construction is projected to account for over half the country’s growth over the next twelve months. The Canterbury rebuild, which is expected to top $30 Billion, will be the driving force for the economic recovery that has struggled to recover from its deepest recession in two decades and has been supported by a resurgent property market in Auckland in recent months.” “Exports will continue to be hampered by a strong NZ dollar, but the country is projected to continue to benefit from equity investors seeking to purchase Australasian assets that continue to beat fixed-income returns.” Says Hamed Mokhtar
Central bank Governor Graeme Wheeler kept the official cash rate at 2.5 percent last month and signaled he will be monitoring the economy for signs of emerging pressure on inflation. Rising property values and record-low interest rates have boosted consumer confidence, encouraging spending in the weeks before Christmas and its immediate aftermath, with retail sales increasing the past three months. The equities market, which surged 25% in 2012, is projected to perform well in 2013.
“New Zealand will continue to benefit from the growth shift to Asia, a transparent economy, political stability, and earthquake reconstruction. Its projected growth for 2013 will outpace those of advanced economies, which the IMF projects to be only 1.5 percent over the same time period, but will be heavily dependent on the economic performance of China, its second largest trading partner.” Says Mokhtar