The Reserve Bank “Dampening Growth"?

25 June 2004

Why The Suggestion Of The Reserve Bank “Dampening Growth”

What can we do to change our nation’s expectations about growth, and keep it going and rising?

That was Michael Barnett’s immediate response to today’s news that growth has reached 2.6% for the March quarter. “

This is a very encouraging result, and reflects well on business – they are performing.”

“I strongly believe that with the right expectations and encouragement from Government, business can keep this level of performance coming,” said Mr Barnett.

“While I understand that Dr Cullen may not have ‘expected’ such a strong performance, nonetheless I only hope the Reserve Bank does not now see our growth success as a threat to inflation and, as has happened in the past, lift interest rates to stifle growth. We need to be much smarter and seek a solution that encourages high growth while also keeping inflation in check,” said Mr Barnett.”

ENDS

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