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Alternative Scenarios

The following scenarios show how the economy might evolve if some of the key judgements in the main forecast are altered (Table 3.1). The scenarios represent two of a number of ways that the economy could deviate from the main forecast. Scenario one represents the economic impacts of a larger decline in the terms of trade. Scenario two represents the economic impacts of a larger migration cycle and stronger domestic demand.

Table 3.1 - Summary of key economic variables for main forecast and scenarios
March years 2013
Actual
2014
Forecast
2015
Forecast
2016
Forecast
2017
Forecast
2018
Forecast

Real GDP (annual average % change)

Main forecast 2.3 3.0 4.0 3.0 2.1 2.1
Scenario one 2.3 3.0 3.4 3.3 1.7 1.9
Scenario two 2.3 3.1 4.6 3.0 1.9 2.0

Unemployment rate1

Main forecast 6.2 5.9 5.4 5.1 4.8 4.4
Scenario one 6.2 5.9 5.7 5.2 4.9 4.6
Scenario two 6.2 5.9 5.2 4.9 4.7 4.4

Nominal GDP (annual average % change)

Main forecast 2.2 6.7 5.7 4.3 4.5 3.7
Scenario one 2.2 6.6 2.6 4.1 4.6 3.6
Scenario two 2.2 6.8 6.9 4.5 4.1 3.5

Current account balance (% of GDP)

Main forecast -3.9 -3.1 -4.4 -5.9 -6.2 -6.3
Scenario one -3.9 -3.1 -6.1 -7.5 -6.6 -6.0
Scenario two -3.9 -3.1 -4.6 -6.4 -6.8 -6.8

90-day bank bill rate2

Main forecast 2.7 3.0 4.3 4.8 4.9 5.3
Scenario one 2.7 3.0 3.3 4.1 4.2 4.7
Scenario two 2.7 3.0 5.0 5.7 5.4 5.4

Total Crown OBEGAL (% of GDP)3

Main forecast -2.1 -1.1 0.2 0.5 0.9 1.3
Scenario one -2.1 -1.1 -0.7 -0.6 -0.2 0.1
Scenario two -2.1 -1.0 0.5 1.1 1.6 1.9

Core Crown net debt (% of GDP)3

Main forecast 26.2 25.8 26.4 25.9 24.9 23.8
Scenario one 26.2 25.9 28.2 28.6 28.7 28.7
Scenario two 26.2 25.7 25.6 24.5 23.0 21.4

Notes:

  1. March quarter, seasonally adjusted
  2. March quarter average
  3. June years

Sources: Reserve Bank, Statistics New Zealand, the Treasury

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