NZ growth ranked as one of the strongest

Brian Fallow at NZ Herald reports:

New Zealand will rank among the strongest-growing of the advanced economies this year and next year, according to the International Monetary Fund’s annual World Economic Outlook.

It forecasts New Zealand’s growth rate this year to be 2.5 per cent, bettered among the 35 advanced economies only by Israel, Singapore, Hong Kong and Korea. The average for advanced economies in 2013 is just 1.2 per cent.

4th in the developed world isn’t bad.

New Zealand also looked relatively good on the fiscal front, with a general government deficit of 0.4 per cent of gross domestic product over 2014, compared with an average deficit of 3.5 per cent for the advanced economies as a whole.

That will change if the Government changes.

Next year’s unemployment rate of 5.3 per cent was not as bad as the 12.2 per cent projected for the euro area, 7.4 per cent for the United States or even Australia’s 6 per cent.

Still too high, but if under Australia that is good.

But the failing grade on the report card was the current account balance: a bottom-of-the-class deficit of 4.2 per cent of GDP this year and next year, worsening to 6.1 per cent by 2018.

The current account deficit is a challenge, but it is less important that the fiscal deficit.