Tuesday 19th January 2010 |
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Debt collection agencyDun & Bradstreet is tipping central bank Governor Alan Bollard will hold off hiking interest rates until the middle of this year.
In its 2010 Economic Outlook and Risk Report, D&B said “the strength of the housing market is among the factors adding to market speculation about when the Reserve Bank will begin to raise its policy rate.”
Property helped underpin the country’s economic recovery last year, which climbed out of its deepest recession in 28 years in the June quarter, and house prices are now 3.8% below their peak in 2007, according to Real Estate Institute data out yesterday.
“Inflation expectations for 2010 barely changed in November” in the National Bank Business Outlook survey, the report said.
“This relatively modest estimate is supportive of the view that the central bank will be able to adhere to its pledge of keeping its policy interest rate unchanged until the second half of 2010.”
The REINZ data showed sales volumes were soft, and Bank of New Zealand currency strategist Danica Hampton said this suggests “vulnerability” in prices and could lead to a slowing in residential construction.
D&B predicts New Zealand's gross domestic product will grow 1.8% this year and 2.2% in 2011, compared to 1.8% and 2.6% growth, respectively, in Australia.
With China likely to achieve 7% economic growth this year, the collection agency predicts the outlook in South East Asia, Australia and New Zealand will follow Chinese demand for raw materials.
The report forecasts unemployment to fall sharply to 5.5% next year, from a peak of 7.3% this year. The Reserve Bank has revised its outlook on joblessness, and expects the rate will peak at 6.7% this year, down from a 7% high forecast in September last year.
(BusinessWire) 12:43:06
Businesswire.co.nz
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