Good to see that the others decide to follow.
This writer has been saying since hearing the expected cost of re-construction of the 2010 Canterbury earthquake may be as high as NZ$4 billion, that it was highly likely that that sort of spending in an economy the size of New Zealand's could act as a catalyst for economic growth.
Been saying that since 2 days after the quake.
So, as I was saying, it's good to see others thinking this way.
From the Macqaurie Bank's "The Australasian Insider Outlook for the March quarter 2011" published 22 December, 2010
"New Zealand: Preparing for take-off.
The Reserve Bank of New Zealand's cautious outlook for domestic demand - and the resultant accommodative policy setting - is likely to be the key factor supporting growth in NZ in the year ahead. We expect interest rates to remain lower for longer, with households and businesses exhibiting a cautious attitude towards spending. This would be supplemented by subdued house prices and weak credit growth. But providing some offset to this would be stronger income growth due to rising employment and strong terms of trade. And this should help generate a gradual pick-up in consumer spending. Meanwhile, events such as earthquake rebuilding and the 2011 Rugby World Cup are also positive. Thus, while we think cautious attitudes towards spending by households and businesses will likely persist, there is enough to suggest that GDP growth will accelerate in 2011."
Have a great New Year!
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