The growth forecasts of our major trading partners indicate the outlook for exports from New Zealand is looking less than great over the next 12 months. However, there may be a more positive outlook towards the end of 2010.

Growth in Australia (our main trading partner taking nearly a quarter of our merchandise exports) has eased back into positive territory, excellent news for us. At the same time, growth in the United States (11 percent of merchandise exports) is still negative. However, clutching at straws, the US economy may not be imploding at quite the same rate as it was three months ago!

Growth forecasts for the Asia-Pacific region excluding the world’s second-largest economy, Japan, are subdued (by their standards) at 3.3 percent for 2009, rising to 6.1 percent in 2010. Within this zone it is the large economies of China (7.2 percent of merchandise exports), India (a small partner for New Zealand) and Indonesia (2.4 percent) that continue to perform. The higher-end manufacturing exporters and re-exporters such as Japan, Singapore, Hong Kong, Taiwan, South Korea and Malaysia (together taking 19 percent of NZ merchandise exports) are expected to shrink through 2009, returning to moderate growth in 2010.

Little need be said about Europe other than it remains deep in the mire. Nevertheless, stock markets around the world are treating stimulus packages and accompanying talk of “green shoots” as just what the doctor ordered. Major stock indices around the world are up between 25 percent and 35 percent in the last three months. 

 - reprinted from BERL Forecasts June 2009