Budget Test Of Growth Forecasts
One of the tests for tomorrow's Budget will be the credibility of the underlying economic assumptions, Opposition Finance spokesperson Bill English said today.
"Today, two reputable economic forecasters have released revised estimates of GDP growth for the next 12 months.
"The NZIER is forecasting growth of 3.0% for the year to March 2001, while BERL is forecasting 2.7% for the same period.
"This is significantly lower than the 3.7% Dr Cullen was forecasting at the time of the BPS.
"If Dr Cullen has not brought his growth forecasts down, the Budget will have lost credibility right from the start.
"Already Dr. Cullen is forecasting rising expenditure in an environment of slowing growth.
"If the forecast downturn in activity over the next three years is any sharper, the Government will have to significantly revise their fiscal plans which means the surpluses could be at risk."