‘N.Z. growth to slacken’

Press, 22 June 1984, Page 1

‘N.Z. growth to slacken’

NZPA-Reuter Paris Economic growth in New Zealand, where the Prime Minister, Sir Robert Muldoon, last week called a snap General Election for July 14, was expected to slacken by about half a percentage point this year and next, said the Organisation for Economic Co-opera-tion and Development yesterday. In its twice-yearly economic outlook report, the 24nation bloc says New Zealand’s recovery seems to have started in the middle of 1983 with a pick-up in

building permits, new car registrations and retail sales, supported by strong exports. Export strength may initially boost this year’s balance of payments, but the current account deficit will remain about 4 to 5 per cent of gross domestic product. It projected 1 to IVz per cent growth in G.D.P. in 1984 and 1985, down from IVz to 2 per cent last year. Inflation and unemployment should rise somewhat, with unemployment up a further IVz percentage points to 7 per cent of the workforce by the end of next year in spite of a possible small recovery in total numbers employed. The report said inflation would rise to 6 or 7 per cent from about 5 per cent in 1983-84.

Labour’s spokesman on finance, Mr Roger Douglas, said yesterday that the O.E.C.D. outlook confirmed the gloomy outlook for the economy.

He said the report predicted rising unemployment, rising prices and slow growth. “In spite of massive borrowing, New Zealand growth continues to be appalling,” said Mr Douglas. “The United States’ economy is growing at 7.8 per cent, the Australian at 6.1 per cent, and Japan’s at 3.6 per cent. New Zealand achieves 1 per cent to 1.5 per cent,” he said. The most damning indictment of the Government’s economic policies was the appalling investment performance. Investment was forecast to fall in 1984.

“There is no way New Zealand is going to get back on the path to growth, jobs, and higher incomes until a substantial amount of productive investment gets under way,” said Mr Douglas.