Slow growth ac­tiv­ity

South Waikato News - - RURAL DELIVERY - By AN­DREA FOX

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.

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