Alternative Scenarios
To illustrate the uncertainty associated with the current economic outlook, two alternative forecasts are presented below. These forecasts differ from the main forecast track by assuming different rates of trading partner growth and illustrate the considerable range in fiscal outcomes that could occur.
Downside Scenario
The main forecast track incorporates a weak growth outlook for our trading partners. It is nevertheless prudent to consider the implications for the New Zealand economy if the slowdown in world growth were to be deeper and more prolonged than assumed in the main economic forecasts. While such a scenario does not represent our view of the most probable path for the New Zealand economy, given the size of downward revisions to the global outlook that have occurred over the past year, there still exists a reasonable probability of such a scenario occurring.
|
(Annual average % change, Year ending 31 March) |
2008 Actual |
2009 Forecast |
2010
Forecast |
2011
Forecast |
2012
Forecast |
2013
Forecast |
|---|---|---|---|---|---|---|
| Real GDP components: | ||||||
| Private consumption | 3.3 | -0.2 | -0.2 | -0.5 | 0.9 | 1.8 |
| Residential investment | 3.8 | -22.0 | -18.8 | 6.3 | 14.1 | 18.4 |
| Market investment | 7.4 | 5.2 | -23.7 | 2.0 | 16.0 | 8.8 |
| Gross national expenditure | 4.5 | -0.1 | -4.1 | 1.0 | 4.2 | 4.0 |
| Exports of goods and services | 2.3 | -1.0 | -3.2 | 1.7 | 8.9 | 7.7 |
| Imports of goods and services | 9.7 | 3.0 | -14.0 | -2.7 | 7.3 | 6.9 |
| GDP (production measure) | 3.2 | -0.2 | -0.3 | 2.3 | 4.5 | 4.2 |
| Unemployment rate1 | 3.7 | 5.0 | 7.2 | 7.1 | 5.9 | 4.8 |
| 90-day bank bill rate2 | 8.8 | 5.0 | 3.5 | 3.2 | 4.0 | 5.0 |
| TWI2 | 71.9 | 53.4 | 48.7 | 51.7 | 52.8 | 52.6 |
| CPI3 | 3.4 | 3.1 | 3.1 | 1.0 | 1.2 | 1.5 |
| Current account balance (% GDP) | -8.0 | -9.7 | -10.6 | -5.6 | -3.1 | -3.5 |
| Nominal GDP level (deviation from main forecast, $billion) |
0.0 | -1.1 | -6.9 | -5.1 | -4.5 | -4.8 |
Sources: Statistics New Zealand, Reserve Bank of New Zealand, the Treasury
Notes:
- 1 Percentage of labour force, March quarter, seasonally adjusted.
- 2 Average for March quarter.
- 3 Annual percentage change, March quarter.
