The Treasury

Global Navigation

Personal tools

Treasury
Publication

Budget 2015 Home Page Budget Economic and Fiscal Update 2015

Alternative Scenarios

The following scenarios show how the economy might evolve if some of the key judgements in the central forecast are altered (Table 3.1). They represent two of the many ways that the economy could deviate from the central forecast. Scenario one represents the economic impacts if the terms of trade fall to a lower level than in the central forecast and recover only gradually over the forecast period. Scenario two shows the economic impact if household demand rises by more than in the central forecast in response to low inflation and if net inward migration is stronger.

Table 3.1 - Economic and fiscal variables for central forecast and scenarios
March years 2014
Actual
2015
Estimate
2016
Forecast
2017
Forecast
2018
Forecast
2019
Forecast

Real GDP (annual average % change)

Main forecast 2.5 3.3 3.1 2.8 2.8 2.4
Scenario one 2.5 3.3 2.4 2.8 3.0 2.5
Scenario two 2.5 3.3 3.6 3.1 2.6 2.2

Nominal GDP (annual average % change)

Main forecast 6.8 3.9 3.3 5.3 4.8 4.1
Scenario one 6.8 3.8 0.7 4.5 5.9 5.1
Scenario two 6.8 3.9 4.0 6.0 5.0 4.2

Consumers price index (annual % change)

Main forecast 1.5 0.2 1.4 2.1 2.0 2.1
Scenario one 1.5 0.1 1.4 1.9 2.1 2.0
Scenario two 1.5 0.2 1.7 2.5 2.5 2.3

Unemployment rate1

Main forecast 6.1 5.6 5.1 4.7 4.5 4.5
Scenario one 6.1 5.6 5.4 5.2 4.8 4.6
Scenario two 6.1 5.6 4.9 4.4 4.3 4.4

Operating balance before gains and losses  (% of GDP)2

Main forecast -1.3 -0.3 0.1 0.6 0.7 1.3
Scenario one -1.3 -0.3 -0.6 -0.3 0.0 0.7
Scenario two -1.3 -0.3 0.3 1.0 1.3 1.8

Net core crown debt (% of GDP)2

Main forecast 25.6 25.7 26.3 25.5 24.4 22.9
Scenario one 25.6 25.8 27.9 27.9 27.2 25.9
Scenario two 25.6 25.7 25.7 24.4 22.7 20.7

Notes:

  1. March quarter, seasonally adjusted
  2. June years

Sources: Reserve Bank, Statistics New Zealand, the Treasury

Page top