23 December 1999

Growth figures too bouncy to bank on - Cullen

"The latest GDP result showing 2.3 percent growth in the September quarter contains as much cause for concern than for celebration," Finance Minister Michael Cullen said today.

"Like the curate's egg, it is good only in part. The 7.3 percent lift in exports is welcome. But there is still no real sign that the gap between imports and exports is narrowing and - until that happens - we cannot claim to have a healthy economy.

"Over the year to September, exports grew only 5.2 percent while imports surged almost 9 percent. And the provisional overseas merchandise trade figures for November, which contain more recent data than the GDP numbers, point to continuing weakness in our balance of trade.

"They suggest a shortfall for the month of $795 million. This is significantly larger than the average November deficit during the 1990s of about $233 million.

"The 2.3 percent GDP figure follows a contraction in the June quarter of 0.3 percent. That is a huge movement between quarters and points to a high and unhealthy measure of volatility in the economic cycle," Dr Cullen said.

"This reinforces the Government?s view, expressed in the Speech from the Throne at the opening of Parliament on Monday, that we must put resources and energy into growing the export sector.

"The only way to improve the living standards of New Zealanders in a sustainable way is by increasing exports, particularly at the high value-added end of the spectrum. That will be a major thrust of our economic strategy," Dr Cullen said.

ENDS

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