27 Sep 2011

PM relaxed about NZ economy

5:39 pm on 27 September 2011

The Prime Minister remains relaxed about New Zealand's growth prospects even though the world economic situation is getting worse.

John Key is promising to deliver continued growth in the face of new forecasts showing that the global economy is slowing.

Just nine weeks out from the general election, Mr Key is optimistic New Zealand can escape the worst of the international downturn.

He says global growth forecasts have been revised downwards from 3.7% to 3.1%, but does not believe growth forecasts in New Zealand will have to be downgraded to reflect the deep economic difficulties in Europe and the United States.

Mr Key says New Zealand's economy is not immune to what is happening around the world, but it is strong enough to cope and should still grow as fast as predicted in the Budget in May.

Labour Party leader Phil Goff says Mr Key is in denial about the state of the economy and the Government has no plan to deal with the growing crisis.

"We've had 100,000 New Zealanders leave permanently for Australia since he's been Prime Minister. We've got nearly 50,000 fewer jobs than when he over the job (in 2008). This isn't good enough.

"He says he wants to muddle through; we need more than a muddle through - we need a plan to turn New Zealand's economy around."

But during Parliament's Question Time on Tuesday, Mr Key rejected criticism that the Government is doing nothing to protect the economy from another international downturn.

Mr Key says the Government has taken steps to protect the economy, including a plan to get its finances back into surplus by 2014-15.

Radio New Zealand's political editor says the Pre-Election Economic and Fiscal Update in October will show whether the Treasury agrees with Mr Key's optimistic view of the economy.