New Zealand in recession

Friday, June 27th, 2008

New Zealand in recession

The March quarter GDP figures released today are disappointing given we have been enjoying some of the best terms of trade in decades, says the Employers & Manufacturers Association (Northern).

"But the figures are yesterday's news because the economy has slumped considerably since then," said Alasdair Thompson, EMA's chief executive.

"The March result should be read as a portent of where the economy has been pointing, and that's into recession.

"The slow-down occurring during a time of good terms of trade demonstrates again the knife edge viability of our economy.

"But successive governments fail to recognize this. They tax, spend and regulate as if all of us are very well off.

"Negative GDP, the poorly current account deficit announced yesterday, and today's backward overseas trade merchandise figures for May all spell out that New Zealand is becoming less viable, with a growing dependence on money borrowed from offshore.

"The figures mean we seem always destined to have relatively high interest rates and falling relative incomes.

"It need not be. Government and business need to develop a new partnership based on a shared goal to achieve a sustainable economy for the success of us as a people."

ENDS

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