New Zealand Manufacturers and Exporters Association
Corner Cambridge Terrace & Manchester Street
PO Box 13-152, Christchurch, New Zealand

Website: www.mea.org.nz

Media Release 6 March 2008.
OCR statement – what are we waiting for?

The New Zealand Manufacturers and Exporters Association, (NZMEA), says that although the Reserve Bank’s decision to hold to the OCR was expected, there are signs that the wider economy is beginning to share some of the export pain; so there is the possibility of a rate cut later in the year.

“The whole economy is slowing fast and today’s Monetary Policy Statement reflected that”, says Chief Executive John Walley.

“The costs to New Zealand companies and households have already risen sharply during the past 12 months due to the increase in the cost of borrowing, petrol costs, the strong NZ dollar, and now we are seeing the returns from housing investment reflecting the declining margins pain for exporters. It is election year, the economy is being squeezed from all sides, and this will put more pressure on the RBNZ for a rate cut in the third quarter this year, any later will be too close or on the wrong side of the election”.

“Certainly the pressure from exporters for a cut will continue. However, the real issue is the underlying policy that drives the two economy rollercoaster. The options are there, such as variable rate compulsory superannuation, and we hope for a lot from the Select Committee on Monetary Policy in this regard”.

NZMEA – the authentic and independent voice for manufacturers and exporters.

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