NZIER quarterly consensus forecasts see average 2.6% economic growth over next 3 years

NZIER quarterly consensus forecasts see average 2.6% economic growth over next 3 years

The New Zealand Institute of Economic Research (NZIER) says its latest consensus economic forecasts predict an increase in economic growth over the next two years, but wages will grow slower than previously forecast and inflation will rise.

NZIER's September Consensus Forecasts suggest economic growth will average 2.6% over the next three years, helped by the Canterbury rebuild and a gradual underlying economic recovery. This is stronger growth than the 1% per year over the past three years, but still behind the 3% of the 2001 to 2008 period.

"The drought will flatten export growth in 2014, but economic growth will remain sound as other parts of the economy grow," NZIER said.

"The outlook for exports after the drought is for steady growth of around 2.6% per year."

And exporters should plan for a high New Zealand dollar for "some time."

The labour market will improve, but NZIER says the consensus forecasts suggest there will be more jobs, fewer unemployed and wages will grow, albeit slower than previously forecast.

"The labour market is slowly improving. The unemployment rate will fall from a peak of 6.8% over the next three years. Wages will grow at a reasonable pace over the next three years (2.9% on average), but slightly lower than in the June survey (3.1%)."

Meanwhile, inflation is expected to rise to 2.4% by 2016 from less than 1% now. However, inflation is expected to stay within the Reserve Bank’s 1% to 3% target band. Interest rates, meanwhile, are seen gradually increasing from early next year.

"By 2016, forecasters expect between a 1.5% point and a 1.7% point increase in the 90 day bank bill rate. On average, the 90 day bank bill rate is forecast to increase from 2.6% in 2013 to 2.7%, 3.4% and 4.1% in 2014, 2015 and 2016 respectively. Longer term interest rates will also rise over the forecast horizon."

The forecasts also see the Government's operating deficit narrowing over the next three years culminating in a return to surplus by the end of 2015, which was the target in the Government's May Budget.

The NZIER Consensus Forecasts are an average of New Zealand economic forecasts compiled from a survey of financial and economic agencies. Respondents to the survey included ANZ, ASB, BNZ, Deutsche Bank, First NZ Capital, Goldman Sachs, NZIER, the Reserve Bank, Treasury and Westpac.

See the full survey results here.

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current wage growth was put  amusingly at 5% by Mr Wheelers right or left hand man
hmmm... those relying on others to pay their way can but dream.

Having read this today, I can see where Wheeler's right hand man got these figures from.
So while the minimum wage earners carry home $30k per year, he earns it in one week.
And we wonder why there is growing inequality in this country.

Could you enlighten us Ostrich ? What is that trend ? 

I get the distinct feeling of chicken and wage growth as long as unemployment is a tad inflation until ppl or enough ppl get a decent % pay rise to absorb it.  Meanwhile the ppl getting no more money wont be buying more expensive things, they will buy less.
Why is this so hard for all, or most of the economists to understand?  Ivory tower syndrome? stupidity? blinkers?
al three?

You dont live in NZ for the wage rates,thats for sure.Power and Rates bills increases easily extinguish any pay rises for many of us slaves.  Of course  If Cunliffe gets to be PM  with his promises of a  Living Wage,  we will see the return of Borrow and Hope to fund it

Power goes up because the present Natioanl Govn demands an excesive return from the SOE' a tax by the back door. One of many you dont seem to question the Nats over.....yet critisise Labour for raising the minimum wage...
So you are not happy the min wage goes up to help with the rising power and rates you complain about...put up under National....
Whos done the borrow and hope for the last 4.5 years btw?
Not that I dont agree that Labour will be better. All the Pollies promise un-ending growth, even the Green's have sold out on that one. No one is making the hard yards like limiting popualtion growth and stopping, no, lets dig our one time resources out now to fund a lifestyle our kids will be disgusted over that we left them so little....
So, yes, everyone is "borrow and hope"

Recent data does not support the claim that power and rates are rising fast.
Yesterday, Q2 rates data was released showing the lowest growth in rates and regulatory income since 1997, suggesting a strong downward trend, and that this area is not pressuring taxpayers.
We are about to get the data release from the very comprehensive MED retail electricity price survey. The previous survey (May-13) showed some of the lowest power and lines charge rises ever. I think this next release will show the same. Again, power prices are not pressuring customers like they used to.

But hikes from a previous time have pushed some over the financial cliff  Read more

Last year, Mighty River Power boss Doug Heffernan was paid $1.49m. But Heffernan was also due to get an additional $500,000 to stay at the helm for its first financial year as a listed company.
Hmmmm.... I think they had to drop the pay is "at risk" or variable depending on the performance of the company clause at MRP due to previously recognized losses many magnitudes greater than the reported salary. Read more
I have said it before and I will say it again - CEO's seeking to justify outsize salaries should be paid stay at home to enable the better qualified to undertake the necessary basic duties.

David Chaston.  What you are saying is the growth in rates is lower than before.  And lowest power price rises ever.  But it's still growth and rises.
There is a mindset that these will always go up.  But actually they actually need to go down. 
Down.  We have a surfeit of overcharging government agencies and government supported monopolies.   It's the big companies against citizens and small and medium enterprises.
When that is sorted we should expect reductions.  To less than 50 % of the current electricity price - for one example. IMHO.  

PS Council debt levels are growing how fast?
Power is charged base don a return on assets? so shove up the price of the assets and you can charge more for more actual costs to you the supplier....
This scamming all over the place has to change....

Yes, but how else are we expected to pay half a million dollars to incompetent Council CEO's and million dollar salaries to failing Energy company CEO's without increasing rates and power prices?!


David,  my rates have risen on average over 18 years = 5.3%. 
You say the rates are not going up much lately, what pray is the increase in debt lately?  Kapiti is adjusting the cost of land under the roads in order not to break its debt the debt seems to be maxed this factored in to the non-rise?
Power, 10 years ago the cost was 10cents? today its 23cents....
Public transport, in the last 4 years my train fares have gone from $45 to $106 a month. Kids fares from $60 a term to $90 a term...
Consider the pay increases ppl are getting in comparison these days for the last 5~6 years, 1.7%?
Meridian ring up offering to lock me into no price rises as long as I pay an extra 1cent up front now. So they are trying to put fear into ppl to make them pay up....
Sure some things are getting cheaper...sure somethings like food is the last few years Ive watched OAPs and others unable to pay for their food at the Countdown checkout...all the above things hammer the poorer hardest....its regressive taxation/costs while the top ppl buy more luxury?

Meridian ring up offering to lock me into no price rises as long as I pay an extra 1cent up front now.
I had to ask a Meridian price reduction hawker to leave the property the other night. Fancy telling me I would be better off transferring from one government entity to another (Genesis) - it's a bloody outrage. State energy pricing should be uniform.

Really its taxation by the back door, using fear but then we shouldnt be surprised, any party saying tax rise is toast.  Jsut what was gained from privatisation? a few years price drop followed by grinding price rises by which ever party was in power on the day.
We as voters need to grow up. We dont ask hard Qs, to afraid maybe?  dunno...we abdicate responsibility to a bunch of 120 odd otherwise no hopers, who pretty much all sell the same snake oil just to a different segment so they can but their lard asses on leather seats for 3 years.....
Just waiting for Whinne to come out slugging for "huge" rises for OAPs as the price of his support....and Im sure someone will pay.

I forgot to mention the house insurance premiums DOUBLING lately for a lot of punters - there goes another  $400 of your pathetic  wage rise . The problem with the data DC quotes  is those warm fuzzy averages dont bear much reality to a lot of  Joe Average people on the ground.Co-workers of mine with youngish families and mgages are really grunting,many small biz are hanging on -just- by paying creditors late .  If Cunliffe plays his cards right and gets that undecided but struggling financially voter Labour could be running the show next year.I think Oz is going to take off again and NZ wage gap will ever widen unless theres some fundamental changes in policy settings