Let’s sing the bull song – or the bear one

Not for the first time, the news media are fascinated at finding The Boss is comparatively bullish about economic prospects over the next year or so, whereas Deputy Bill is more chary and hence bearish.

Alf suspects the media hacks spend their time scouring political statements for disparities. This is not as demanding as getting off your arse and finding real news.

And not as easy as finding someone – if there is such a creature – who can predict with authority our economic future.

The NZ Herald reports today:

The views of Finance Minister Bill English and Prime Minister John Key on when New Zealand will emerge from the recession are in stark contrast.

Mr English said yesterday that he thought New Zealand was “unlikely to aggressively grow out of it”.
But Mr Key says that by this time next year New Zealand would be starting to come out of it “reasonably aggressively”.

Mr Key made his comment on March 22 on TVNZ’s Q & A; Mr English made his comments on the same programme yesterday.

So what’s the big deal, here?

Sure, it would be great if the country’s PM and his deputy were singing from the same song sheet.

But which song sheet?

A quick check with the Institute of Economic Research’s oddly named “Consensus Forecasts” shows that, last month, the country’s top economic forecasters differed hugely about what they were seeing in their crystal balls.

Some say the economy will shrink again, in the year to 2009/10; some say it will grow (but modestly).

The range of forecasts for GDP was a -2.2% decline to 1.1% growth. The average forecast was a decline of -0.6%.

For 2010/11 the forecasts range from growth of just 1.5% to a robust 4.8%. The average is 2.7%.

If the experts can’t agree, whay must our leaders – and if they are to agree on just one of the wide array of economic forecasters, which one should it be?

Asked about the difference, according to the Herald,

Mr English said Mr Key “has always had a very positive view about New Zealand. I certainly wouldn’t want to say he is wrong but he is setting a high hurdle here and it’s our job as a Government to meet those expectations – that’s a feature of John Key’s leadership.”

Mr English said he would not want to guess when the recovery would occur but said it would be relatively slow.

It would be based on exports and on savings rather than readily available credit.

Mr Key said he believed that by the end of this year or early next year “we’ll be starting to come out of that and I think starting to come out of that reasonably aggressively”.

At that point, deep in the story, the Herald yields a nugget of news:

Mr English “indicated” that although a start would be made this year on Mr Key’s idea of a national network of cycleways,

spending on it would be nothing like the $50 million originally estimated as the cost.

“It will start smaller and as confidence builds and the economy improves, it can grow bigger,” he said.

“We won’t be spending $50 million on it this year or next year or the year after.”

So why didn’t the lazy buggers go to Key to find if English has got it right? And if he disagrees, how come?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: