Pos­i­tive eco­nomic growth

Matamata Chronicle - - Property - GER­ALD PIDDOCK

Strong macro eco­nomic in­di­ca­tors and im­prov­ing dairy prices are all point­ing to­wards a pos­i­tive growth story for the New Zealand econ­omy, a top econ­o­mist says.

Speak­ing at a seminar at Kara­piro, BNZ se­nior econ­o­mist Doug Steel said New Zealand ‘‘stood out a long way’’ with a 3.6 per cent an­nual eco­nomic growth rate and was on top of the world in com­par­i­son to other coun­tries.

These in­di­ca­tors in­clud­ing em­ploy­ment, mi­gra­tion, build­ing con­sents and tour- ism were very strong, de­spite what had hap­pened in the Glob­alDairyTrade and dairy sec­tor over the past two years.

Steel said the bank had lifted its milk price fore­cast to $6 per kilo­gram of milk­solids for the cur­rent and next sea­son fol­low­ing the re­cent GDT lift and the fall in milk pro­duc­tion.

The New Zealand cur­rency had hardly moved af­ter the lat­est auc­tion and Steel said this was be­cause the mar­ket was more con­cerned with the up­com­ing US elec­tion.

He pre­dicted a volatile time ahead for the US dol­lar re­gard­less of who won and be­lieved the New Zealand dol­lar would fall into the 60c range next year.

In over­seas dairy mar­kets, low grain prices would mean US dairy pro­duc­tion would lift by 2-3 per cent in 2017.

In Europe, pro­duc­tion had steadily de­clined since De­cem­ber last year and he ex­pected this to con­tinue.

There was also over 400,000 tonnes of skim milk pow­der in stor­age in Europe and Steel be­lieved those stock­piles had con­trib­uted to whole milk pow­der sell­ing at $3300 a tonne and skim milk pow­der at $2300 a tonne at the lat­est GDT auc­tion.

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