NZ growth remains on track - IMF
While the International Monetary Fund is warning of "sluggish and bumpy" global growth ahead, the New Zealand economy is still on track to grow over 3 per cent next year.
The IMF's latest World Economic Outlook report, released this morning, slightly trimmed New Zealand's expected 2013 GDP growth to 3.1 per cent, a 0.1 percentage point dip below April forecasts.
That was against a backdrop of deteriorating global growth forecast for next year, which the IMF downgraded to 3.6 per cent from 3.9 per cent in July.
The IMF said that in advanced economies, growth was now too low to make a substantial dent in unemployment.
However, it noted that activity in some regions, including New Zealand, had been boosted to some extent by recovery and reconstruction from natural disasters.
The good news was that our unemployment rate was forecast to drop back to 5.7 per cent in 2013, from an estimated 6.6 per cent this year.
New Zealand's economy is holding up better than our trans-Tasman neighbours, who had their 2013 growth prospects pared back 50 basis points to 3 per cent.
But both New Zealand and Australia are forecast to develop at twice the speed of other advanced economies next year, which average just 1.5 per cent growth.
The IMF said the slowing down of economic juggernaut China, which is New Zealand's second largest trading partner, had affected activity in the Asia-Pacific region.
It said near and medium-term outlooks for the region were less buoyant, with a return to double-digit growth for China unlikely in the next year.
The IMF report follows a gloomy outlook from the local NZIER quarterly survey of business opinion today.
The survey results suggested annual economic growth would slow from a solid 2.6 per cent in the June quarter, towards 1.5 per cent in the second half of 2012.