James Weir at Stuff reports:
The economy will grow almost 4 per cent next year, helped along by a strong population gain from surging immigration, according to Westpac Bank’s latest predictions.
The bank has upgraded its forecasts for this year slightly to 2.8 per cent, followed by growth of 3.8 per cent next year.
The economy had moved beyond the recovery phase and into solid expansion this year, despite the brief but intense drought last summer.
It was set for a big burst in the second half of this year, with a “remarkably swift” turnaround in milk production in the last few months.
At times like this I recall how the Green Party climate change policy is to shoot around one in five cows. Okay they don’t literally say shoot, but they clearly say they want a reduction in the number of cows.
That meant growth was shaping up to be well above 1 per cent for the September quarter, Westpac says in its latest Economic Overview.
Hiring intentions have also risen as companies become more confident and Westpac is forecasting unemployment to fall to 5 per cent by the end of next year.
That would be great.
Job prospects in New Zealand and Australia are the key driver of migration. As the job market softens in Australia as the mining investment boom passes its peak, more New Zealanders are coming home and fewer are leaving for Australia, Westpac says.
A double win.