Bank on unemployment

Press, 15 August 1988, Page 3

Bank on unemployment

By

PETER LUKE

Registered unemployment will rise to more than 145,000 and 31,000 workers will quit New Zealand by March, 1990, according to the latest Reserve Bank forecast.

Although the forecast confirms that the Government is winning its economic battle on the inflation front, it suggests there will be dramatic rises in joblessness, especially over the next seven months. Registered unemployment stood at 100,600 in March this year. But the Reserve Bank predicts a 41.1 per cent increase to March next year, followed by a much smaller 3.2 per cent rise to March, 1990.

That would give totals of 141,990 in March, 1989 (10.6 per cent of the workforce), and 146,400 (10.9 per cent) in March, 1990.

The bank expects full-time jobs to continue to fall — by 3.7 per cent — to March, 1989, before rising very slightly the next year. . Although economic activity was likely to pick up gradually during 1989-90, the bank expected employers to react cautiously, opting, to some extent, to take on part-time employees in place of full-time workers. New Zealand was likely to suffer a net loss of 15,000 workers this year, and another 16,000 in 1989-90, drawn predominantly to the relatively better conditions across the Tasman. But the bank’s good news for the Government was that inflation appeared to be coming down to a level comparable with major trading partners. It predicted March year inflation rates of 3.9 per cent in 1 OSSSO and 2.9 per cent in 1989-90.