I struggle to follow the logic behind this report for the following reasons:

- a fall in the NZD is cited as a positive factor in a short term recovery. It may well work that way over the long term as NZers gradually shift away from more expensive imports, but in the short term it's a negative factor as we are a net importer;

- energy prices may well fall in USD terms but are unlikely to do so in NZD terms if, as the author says, the NZD falls;

- wage growth will stall as more businesses go to the wall. Business insolvencies and unemployment are lagging indicators and only show up in the figures a few quarters after the beginning of a recession;

- how are the two statements that food and energy prices are past their peaks, but inflation is likely to go higher, reconciled?

- the report underestimates the impact of the credit crisis on the availablity of funds to support businesses and the property market. The misallocation of capital is nearly always the prime driver of any recession.

Janet, thanks for setting my mind at ease. I thought it was funny that we were all walking across the paddock in a long line into that big shed over there after an exciting ride in a big truck and that nobody is coming out the other side of the shed. But now the NZIER has told us everything's all right, I think I'll just follow everyone else.

The report is not credible.

The Credit Crunch is on going and New Zealand has not escaped its grip. In case no one has noticed, New Zealand is getting more hammered than most other countries by the current financial crisis.

There's plenty more pain for New Zealanders to take yet. 2008 is a write-off.

Excellent question, Shaun !
I mean after all, interest.co.nz was sounding the "take care" warnings about Hanover Finance months before the suspension of redemptions fiasco that now embroils that company.

Neven, I would be very interested to know your background and occupation. Are you Peter Neven? Treasury or Fletcher Challenge? you may have shown your flag sometime in the past, but I have not seen.
Remember folks, that most market declines have historically had double tops, that is one decline followed by a rise that does not meet the previous high, then declines once again. I allege this happens when the insider few have exited the market before the first fall, but the influencial few who were not fortunate enough to get out at the right time, the first time, then set about talking the market up again, so as they can attract some more fools to buy in, in order that get out before the market continues on its decline.
Cheers
Iain

Hey Neven - I agree with all the above, but wouldn't go for the Nats either as they will be sheltering so many unpleasant individuals hoping to make a fast buck while no-one is looking.

Shall we form a new party then?