Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Slow Action On Interest Rates Holding NZ Back

The 0.25 per cent cut in the official interest rate today underlines again the excessive caution of our Reserve Bank, the Employers & Manufacturers Association (Northern) says.

"We are disappointed though unsurprised at this morning's announcement on interest rates," said Alasdair Thompson, EMA's chief executive.

"The no-growth outlook for our exports outweighs any short term pressures from wage inflation.

"Business accepts there are some risks to inflation in the economy from skills shortages and low unemployment, but they are no different from similar trends in Australia and the US where interest rates are much lower and going down faster.

"The US rate is now 43 per cent lower than ours and the Australian rate is 15 per cent lower.

"We have to repeat our earlier warning that the present growth cycle has peaked and the risk for inflation has diminished accordingly.

"Since we have managed only three months of tiny trade surpluses over this cycle, the flow on effects of the commodity boom will be limited and mainly in the rural economy.

"Hence the Reserve Bank should shelve its caution for the time being and look at the benefits for inflation from making a bigger cut to interest rates sooner rather than later.

"This would promote anti-inflationary investment to increase production capacity and productivity."

Ends


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

CO2 And Water: Fonterra's Environment Plans

Federated Farmers support Fonterra’s bold push to get to zero emissions of CO2 on the manufacturing side of the Co-operative, both in New Zealand and across its global network. More>>

ALSO:

Fisheries: Decision To Delay Monitoring ‘Fatally Flawed’

Conservation group representatives say a decision by the new Minister of Fisheries, Stuart Nash, to delay implementation of camera monitoring of fishing efforts in New Zealand is ‘fatally flawed’. More>>

ALSO:

Kaikōura Quakes: One Year On

State Highway One and the railway were blocked by damage and slips and the Inland Road suffered significant damage. Farms, homes and businesses suffered building and land damage. Power and internet went down, drinking water systems, sewage systems and local roads were all badly affected... More>>

ALSO: