Slow growth activity
Waikato farmers and rural industry stakeholders are likely to be shy about opening their wallets for some time yet, judging by the economic prognosis from a visiting senior bank economist.
Doug Steel, of BNZ, told a KPMG rural update seminar in Hamilton that with New Zealand posting recent growth rates of 2 to 2.5 per cent and the annual growth outlook for the next few years about 2 to 3 per cent, its economy was a good deal healthier than many.
But agriculture would probably be on the lower end of the growth activity to come because of the continuing strength of the kiwi, he said.
Interest rates were expected to push a bit higher late next year or early 2014 and international commodity prices were already showing slight improvement.
But next month’s GDP figures could show it went backwards in the third quarter, Mr Steel said.
The BNZ believed some of the recent negative data like the surprise rise in unemployment was ‘‘a pothole’’ on the road to a generally slowly improving economic performance, but the road was ‘‘getting seriously tested’’.
The chances of the Reserve Bank lowering the official cash rate were getting less by the day because of the possibly inflationary effect.