When the Government acknowledges the slowing of New Zealand GDP growth, it is to global risk it prefers to point.
In fact in her pre-Budget speech to Business NZ, Prime Minister Jacinda Ardern was happy to throw European uncertainty and the UK’s Brexit turmoil into the mix.
That’s politics I guess.
But in fact, New Zealand currently appears to be a net beneficiary of global economic events.
Export prices for New Zealand commodities have remained very strong.
In March, New Zealand exports rose $899 million (19 per cent) to reach $5.7 billion – a new record for any month ever.
In the year to April 2019, annual goods exports to China increased $2.7 billion (22 per cent) from the April 2018 year to reach $15 billion for the first time ever.
So blaming Europe for our low growth is silly.
So why not acknowledge why it is really happening?
The housing market is headed into a cyclical slump.
Business is not happy and not investing.
This has all the makings of a classic kiwi economic cycle.
And if investment stays low, the Government’s surplus may become a deficit.