26 Sep 2009

Further job losses to come, says NZIER

5:38 pm on 26 September 2009

The New Zealand Institute of Economic Research is standing by its prediction of 30,000 more job losses.

The economy expanded by 0.1% in the June quarter, ending 15 months of economic decline.

Prime Minister John Key says that may translate into lower jobless figures, with the Reserve Bank now believing unemployment will peak at 6.8%.

But the institute's assessment of data from sources including the Treasury and the Reserve Bank remains as it was in June: that thousands of additional jobs will be lost by March 2011.

Senior economist Shamubeel Eaqub is pointing to a recent fall in imports as a major factor for employment.

Finance Minister Bill English says the news over the past week has given some hope that unemployment will peak near the Reserve Bank estimate.

"This week we've had a better GDP number than expected, we've had an increase in the Fonterra payout, we've had announcements around people looking at new investments, and that's all an improvement in the outlook for more jobs," he says.

Mr English says unemployment may be even lower than 6.8%.