21 Sep 2012

Signs good for moderate NZ growth, says English

8:58 am on 21 September 2012

Finance Minister Bill English says the rebuild of earthquake-damaged Christchurch and a good agricultural season are behind continued growth in the economy.

Gross Domestic Product (GDP) - a measure of the economy's production - was up 0.6% for the three months to June, driven by a growth in milk production and construction in Christchurch.

That pushed annual growth to 2% for the year ending June 2012 - a level not seen in more than four years.

Mr English told Radio New Zealand's Morning Report programme on Friday the signs are good that New Zealand is on the path to moderate growth.

The minister says the Christchurch rebuild is huge and likely to pick up in speed, but it has a long way to go before it reaches full speed, but the agricultural effect might not continue in the same way.

The Canterbury Chamber of Commerce says future growth in the city is enormous, with a predicted $30 billion to be injected into the local economy.

Chief executive Peter Townsend told Morning Report the rebuild is so big, the rest of the country will share in the economic benefits.

But the Labour Party says it is a problem that the country's economic growth is still not being paid for by earnings from exports. Finance spokesperson David Parker says fundamental problems persist.

"It's not as bad as it is in some parts of the world, it's worse than it is in other parts.

"The main underlying problem is that growth is still not being paid for by earnings from our exports, which don't cover the cost of our imports and our interests - and that's why we're losing so many export jobs."

New Zealand First leader Winston Peters says the GDP figures are simply a convenient blip for the Government that won't last, because the current account deficit is forecast to creep up.