Scoop has an Ethical Paywall
Licence needed for work use Learn More

Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Cut Interest Before Power Costs Impacts Economy

Cut Interest Rates Before Electricity Costs Impact On Economy

Interest rates should take into account the prospect of price rises caused by the electricity crisis says Business New Zealand Chief Executive Simon Carlaw.

"The Reserve Bank should take the opportunity to cut the official cash rate this week," Mr Carlaw said.

"Global markets remain uncertain, as shown by our faltering export performance in manufactured goods. The domestic economy is still fragile and the level of investment in future capacity is still a concern. Domestic inflation is not a significant issue.

"Action now would offset problems ahead. Drought will have a double banger effect on the economy - commodity returns will be checked, and electricity price increases on business and industry will inevitably be passed on. The impact needs to be taken into account now, not when it hits consumers.

"The Reserve Bank should be well aware of the effects of shutting the stable door after the horse has bolted."

Ends


Advertisement - scroll to continue reading

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Business Headlines | Sci-Tech Headlines

 
 
 
 
 
 
 
 
 
 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.