New Zealand's export sector is expected to lead a subdued recovery in coming years as consumer spending is muted by high unemployment and falling real wages, according to a new survey.
The Institute of Economic Research's quarterly consensus forecasts estimates the economy will shrink 0.4% in the year to March, before rebounding to grow 3.1% next year and 3.2% in 2012.
It is slightly better than the previous set of forecasts, though economists' predictions about the future health of the economy range from a modest 1.8% to a strong 4.1%.
NZIER principal economist Shamubeel Eaqub says economists think an export-led recovery is on the cards at this stage, with household spending likely to play a supportive role.
The survey shows nominal wage growth will lag inflation, while business investment is not expected to pick up until later in 2011. Unemployment is expected to peak at 7.2% next year.
