Stronger growth expected next year

WELLINGTON - Economists over the past three months have lowered their growth forecasts for this year but have lifted their projections for next year.

The New Zealand Institute of Economic Research's quarterly consensus survey covers the views of 13 private forecasters, plus the Treasury and Reserve Bank.

The latest soundings were taken before the June quarter current account and gross domestic product figures were released, both worse than expected.

The consensus forecast growth of 3 per cent in the current March year compares with 3.1 per cent forecast in June, while next year's forecast is now 3.7 per cent, compared with 3.5 per cent earlier.

The NZIER says the main factor driving the growth profile is strong investment growth, with residential investment forecast to grow 10.9 per cent in the current March year.

Forecast growth in private consumption - two-thirds of the economy - is 2.2 per cent this year (2.5 per cent previously) and 3 per cent next year (2.8 per cent).

Export volumes are expected to grow 5.4 per cent this year and 5.3 per cent next year, while imports are forecast to increase 8.4 per cent this year and 3.6 per cent next year.

The economists are picking unemployment rates of 6.1 per cent next year and 5.6 per cent the year after. The current rate is 7 per cent.