Critics look for jobs, wage hike in New Zealand economic forecast

The New Zealand government Tuesday claimed credit for a forecast acceleration of economic growth, although critics questioned the rate of jobs growth and said most people were seeing their wages stagnate. Finance Minister Bill English said the Treasury's Half-Year Economic and Fiscal Update forecast a relatively strong upturn, with economic growth reaching 3.6 percent in 2015 and the unemployment rate falling. The forecasts showed the government posting a modest operating surplus before gains and losses of 86 million NZ dollars (71.08 million U.S. dollars) in the 2014-2015 fiscal year, before it ballooned to 1.7 billion NZ dollars and 3.1 billion NZ dollars respectively in the following two years. Debt was forecast to fall, with net core government debt expected to peak at 26.5 percent of GDP in 2014-2015, before falling to 16.9 percent of GDP in 2019-2020. The New Zealand economy continued to expand through 2013, growing at 2.5 percent in the year to June -- despite the severe drought in the last southern summer which significantly restricted growth in the first half. This was among the higher annual growth rates among developed countries, said English. "On average, wages are increasing faster than inflation, business confidence is at its highest level since 1999 and the terms of trade remain high. There are over 53,000 more people employed now than a year ago, and the unemployment rate is dropping as the economy gathers strength," English said in a statement. However, the main opposition Labor Party said that five years on from a recession, with a rebuild of the earthquake-battered Canterbury region costing 40 billion NZ dollars and the best terms of trade in 40 years, the recovery was bypassing most New Zealanders. Labor finance spokesperson David Parker said wages were stagnating -- growing at half the rate of inflation in the last quarter -- and job growth was lagging behind economic growth. Most of the rewards of economic growth were "going to the small proportion of the population that are already the best off," Parker said in a statement.