21 June 2012

GDP result no reason for complacency

“The higher than expected increase in GDP in the March quarter would have been more welcome if it had resulted in falling unemployment and more money in the hands of the people who need it most,” says CTU Economist Bill Rosenberg.

“Instead unemployment rose to 6.7 percent in the quarter and household expenditure rose by only 0.1 percent. It is good to see continuing strength in food manufacturing, but other forms of manufacturing are still being hurt by the high exchange rate.”

“Construction is still in the doldrums despite growing needs in Canterbury and needs for new housing in Auckland.”

“With increasingly pessimistic international forecasts, it is still important for the Government to review its economic policies and its approach to jobs and getting money into people’s pockets, as well as its Budget surplus target,” Rosenberg said.

“Earlier this week, the Government said the surplus target could well stretch out another “year or two” and said it was asking Treasury for an interim review of the economy. A review is absolutely necessary”, says Rosenberg. “But it is also time for a policy rethink. Relaxing its surplus target position gives the Government room to move on stimulating job growth and support for people seeking jobs.”

ENDS

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