Economists at BERL are predicting New Zealand’s economy will continue growing.

For the year ahead BERL is forecasting:

• Net migration gain will reach a net 17,000 after bouncing back strongly in the past few months.
• Employment and economic growth will be spearheaded by infrastructure spending from businesses and the government.
• Annual GDP growth will bottom out at 1.9% in 2007. The following years will see a resurgence in activity, with GDP growth averaging 2.4% in the March 2008 year, followed by 3% in the year to March 2009.
• The export sector will not grow quickly despite the falling NZ Dollar. Growth will be tempered by decisions made by businesses when the NZ Dollar exchange rate was higher.

Speaking to TV One, BERL’s Senior Economist Ganesh Nana said net migration to New Zealand had started to increase again and would reach 15 to 20 thousand this year. Dr Nana said it was encouraging to see Kiwis returning to New Zealand from the UK and USA.

Dr Nana was concerned by the danger of the NZ$ going from a position of unrealistic strength in 2005 and earlier in 2006 to unrealistic weakness, making it difficult for exporters and importers to manage their businesses efficiently.

A period of “unrealistic weakness” in the NZ$ is, of course, an attractive time to arrive in New Zealand because of the high purchasing power of overseas currencies at such a time.