tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Sunday, December 8th, 7:32PM

Investments

rss
Latest Headlines

Keep South Canterbury in perspective: NZIER chief economist

The biggest danger from the South Canterbury Finance receivership is overblowing its importance to the wider economy, sparking an unnecessary impact on consumer and business confidence, says the New Zealand Institute of Economic Research's principal economist, Shamubeel Eaqub.

Tuesday, August 31st 2010, 4:33PM

by BusinessDesk

"Farm debt in New Zealand is $47 billion, on a total farming business of around $120 billion," he said. South Canterbury's liabilities, at $1.6 billion, were equivalent to just 3.4% of total farm lending, and just 1.3% of national farm assets.

By comparison, SCF's $1.6 billion in total liabilities - and a likely net Crown exposure of perhaps $700 million - was less of an economic shock than the high profile of the issue might imply, Eaqub said.

"We need to keep this in context, relative to the stock of debt. For the local economy, particularly around Canterbury and Timaru, this will have some big financial and confidence impacts.

"But it's the confidence aspect that's important, and the potential loss of confidence through to investing in general that I worry about. I don't think there needs to be," Eaqub said.

"Our banks are pretty strong, they are well rated, and have plenty of cash. Depositors (in SCF) are guaranteed, so there won't be a spending shock."

Eaqub cannot be accused of trying to talk the situation up. NZIER today published a gloomy outlook for the New Zealand economy over at least the next year. The only bright spots are that unemployment rates should remain stable and interest rates will rise more slowly, as the pace of both the local and global economic recoveries slow

« Scales unaffected by SCF receivershipRates Round Up »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
Today's Best Bank Rates
Rabobank 5.25  
Based on a $50,000 deposit
More Rates »
News Bites
Latest Comments
Subscribe Now

Deposit Rates newsletter

Previous News

MORE NEWS»

Most Commented On
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com