Bill English National Finance Spokesperson

19 April 2001

Interest rate cut shows growing concern

Today's interest rate cut by the Reserve Bank shows the growing concern about the slowdown in growth in our major trading partners and it's implication for New Zealand, National's Finance spokesperson Bill English said today.

Mr English said New Zealand has been running a two-speed economy recently, the combination of strong exports and a weak domestic economy.

"With export growth likely to slow before it has had a chance to trickle down to average Kiwi families, we risk becoming a no-speed economy.

"The concern around global growth outlook is highlighted by today's decision by the US Federal Reserve to lower interest rates again.

"That is not to say that the Reserve Bank in New Zealand doesn't still have a difficult task to manage. While it has to weigh up the likely impact of slower global growth on New Zealand, it also remains concerned about the persistent weakness in the New Zealand dollar that will continue to put upward pressure on prices.

"Putting today's action alongside last week's drop in business confidence highlights the growing gap between Dr Cullen's smug attitude about the economic outlook and the views of experts and the business community," Bill English said.

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