Bishop’s Slough of Despond

Alf has gone back to Radio New Zealand National’s infamous bunch of prattlers, The Panel, to pluck out another gloomy-guts to be punished for spreading blarney about our economic outlook.

Are they staffed with subversives at Radio NZ, nowadays, he wonders – broadcasters on the lookout for economic pessimists with the gift of the gab to spread their dyspepsia?

The outlook is bad enough without the depression from a bloke called John Bishop (whose name perhaps explains the ecclesiastically unctuous tones with which he spread the Bad Word yesterday).

Bishop popped up on the programme with Tony Doe, obviously a splendid fellow, because he denied being a recession-denier but did regard himself as a glass-half-full man. We like that.

He believed recessions were worsened if belts were tightened unnecessarily; he saw no need to panic; he wanted people to “just get on with it”.

Confidence was a crucial thing (Alf was tempted to say confidence is the trick, but smartly saw how “confidence trick” might be seized on by by querulous doomsayers.)

This bugger Bishop broke in at this point of the broadcast to counter “I hate to be a Jeremiah about this – but…”

And you knew damned well he was itching to tell us why he is a modern-day Jeremiah

He is bothered by the prospect that overseas investors will lose their enthusiasm to lend us money as our economic sluggishness persists (a fair point).

But then he said whether we have negative 1 per cent growth or negative 2 per cent was neither here nor there.

An extraordinary utterance.

The difference between 1 per cent and 2 per cent growth is considerable, in a country which gets excited when it can exceed 3 per cent annual growth. So how come it’s no big deal when we are measuring shrinkage?

Bishop then warned darky that we are vulnerable to China and South-east Asia and Australia – if they go into recession, we’ve got less to export.

Or words to that effect.

So who gave Bishop the idea China is going into recession?

Slowing down, sure – slowing to a growth rate we can only envy.

The International Monetary Fund told the story when it released its latest forecasts. As AFP reported

The embattled world economy is crawling to a halt under the financial crisis and would grow by only 0.5 percent this year, the slowest pace since World War II, the International Monetary Fund said Wednesday.

“The world economy is facing a deep recession,” the IMF said in an update of November forecasts that shaved about 1.75 point off its prior global growth estimate.

The IMF said the advanced economies were now seen contracting by 2.0 percent, a sharp downward revision from the negative 0.3 percent estimate two months ago.

“Despite wide-ranging policy actions, financial strains remain acute, pulling down the real economy,” the 185-nation institution said, warning the outlook was highly uncertain.

The United States, the epicenter of the financial crisis, would endure a 1.6 percent contraction, the IMF said, slashing its prior estimate of 0.9 percent.

Nonetheless, the world’s biggest economy would weather the financial storm better than most other major advanced economies.

Japan’s economy would shrink by 2.6 percent in 2009 instead of the mild prior estimate of 0.2 percent. The world’s second-largest economy would be in recession for the second consecutive year, following a 0.3 percent contraction in 2008.

The 27-member eurozone economy would hit a wall, suffering a 2.0 percent contraction after growing 1.0 percent in 2008. The previous 2009 estimate was for a 0.5 percent contraction.

Germany, Europe’s biggest economy, would shrink by 2.5 percent this year after a 1.3 percent expansion in 2008, according to IMF figures published six days ago.

Britain would suffer the most, with gross domestic product (GDP) activity contracting 2.8 percent, after 0.7 percent growth last year.

Of the major advanced economies, Canada would be the least affected, hit with a 1.2 percent contraction.

The outlook indeed is a bit cheerless for our exporters.

But here’s the thing that suggests Bishop should find another Good Book for his texts, next time he gets into economic sermonising.

Developing countries were forecast to have relatively weak growth of 3.3 percent in 2009, about half the 6.3 percent expansion of last year.

China would remain the world’s fastest-growing economy, putting in a 6.7 percent pace, down from 9.0 percent in 2008.

India’s economic growth would slow to 5.1 percent after 7.3 percent

The end of the world is not yet nigh, so let’s go with Doe, and drink to a glass half full.

One Response to Bishop’s Slough of Despond

  1. LaFemme says:

    Good to read some hopeful words for a change. Keep up the good work!

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