N Zealand upbeat about economic future

WELLINGTON: New Zealand’s central bank governor painted a glowing picture of the economy on Thursday just days after Prime Minister John Key resigned, but warned of uncertainties ahead.

In a speech to an economic development conference, Graeme Wheeler said that “in many respects the economy is performing well”.

“Relative to the trends over the past two decades, we are experiencing stronger economic growth, lower inflation, and a lower unemployment rate.”

His forecast came as the country prepares for the election of a new prime minister following Key’s sudden departure this week for family reasons.

Current Finance Minister Bill English, who guided New Zealand through the global financial crisis, is expected to replace him and maintain current economic policies.

Wheeler said that in the absence of major unanticipated shocks, “prospects look good for continued strong growth over the next 18 months”, driven by construction spending, migration, tourism and accommodative monetary policy”.

But while the Achilles heel of many New Zealand expansions — a large current account deficit — has not eventuated, Wheeler cautioned that not everything was positive. Economic growth, now entering its eighth year, was weaker than other post World War II expansions, gross domestic product growth on a per capita basis was slow and labour productivity growth disappointing, he said. — AFP