‘Economy on mend’

Press, 27 December 1980, Page 4

‘Economy on mend’

PA Auckland The economy is on- the mend, according to; .the Prime -Minister. (Mr Muldoon) |arid- New Zealanders should', not •be too - pessimistic about 1981. i : . Mr Muldoon said yesterday that he thought unem r ployment had reached its P New schemes for dealing with,. youth unemployment and private enterprise subsidy projects would improve matters, he said but basically, the economy would not be-much better until the last quarter ofnext year. >-.The new energy-based programmes would help directly and would also boost confidence. Economic activity would . be increased, providf ing'more jobs. .

’■ Mr Muldoon said.his view , was shared by organisations such,’ as the .Organisation for Economic Co-operation and Development, the Institute of /Economic Research, ' and the International Monetary Fund team, which had visited New Zealand recently, i "A lot of the things we have been trying to putrinto place in the past year or two are now becoming apparent,” he said. ■; New Zealand was doing better economically , than most Western countries fbr two maiii. reasons: It /had been’ < able to increase production, and it had optimism about its energy-based prp- . jects. .T. ' , . . ' - The latest statistics on New. Zealand’s, /balance of

payments showed an improvement on forward projections. Forward readings for the final quarter' of the year indicated that the rate of inflation would hot be' up. "These, things are not major indicators,"- said Mr Muldoon, "but taken together .they mean- we should not be too pessimistic. They are all coming up a little better than forward projections — so that is good.” , He said the coming oil

price increase was a problem which could be coped with. The price would go up about the international rate of inflation. But, New Zealand could expect exports to go up by about the same amount, so one rise would offset the other. •>- .

Mr Muldoon predicted a brightening in the economy towards the end of 1981 and into 1982. Business interests would, he said, be thinking in terms of expansion rather than contraction.