25 Oct 2011

Week's figures to paint picture of state of economy

8:01 am on 25 October 2011

A clearer picture about the country's economy and public finances is expected to emerge this week.

The slow global economic recovery and the ongoing European debt crisis are likely to curb activity in New Zealand and in turn keep interest rates on hold for a while yet.

Inflation figures are due out on Tuesday morning and the government's pre-election economic and fiscal update will be released on Tuesday afternoon.

The Reserve Bank makes its latest review of the Official Cash Rate on Thursday.

Infometrics senior economist Gareth Kiernan says there could be a substantial hit to Treasury's growth forecasts over the next 18 months or so.

He says every percentage point of economic growth is worth about $500 million in tax, so the impact on the fiscal situation is significant.

Mr Kiernan says the Government will be pushed to meet its target of returning the Budget to surplus by 2015 if it is re-elected.

He says underlying inflation is still reasonably under control and the Reserve Bank is likely to wait until at least March next year before starting to increase interest rates.

Other figures due out this week include the Consumer Price Index for the September quarter on Tuesday and the National Employment Indicator for August.

The National Bank's monthly business confidence survey will be released on Wednesday and trade figures for September will be made public on Thursday.

The annual meeting season also gears up this week.

There are AGMs for Metlifecare and Just Water International on Tuesday; Telecom, New Zealand Oil and Gas and Skellerup on Wednesday; Freightways, Port of Tauranga, Auckland International Airport, TeamTalk and New Image on Thursday; and Vector, Heartland New Zealand and NorthPort on Friday.