Talk Money: March 18, 2016

Tony Field (Paul Henry)
Tony Field (Paul Henry)

The latest growth figures are better than many people were expecting. But some economists say the numbers still point to further interest rate cuts.

Growth was 0.9 percent for the final three months of last year. That helped the economy grow by 2.5 percent for the whole of 2015..

Tourism, migration and construction helped offset the slowdown in the dairy sector.

But if you strip out the rise in the population economic growth was almost flat.

The increase in people being available for work means that employers do not have to be so generous with wage increases. Wages fell by 0.4 percent last year on a per capita basis.

Weak wage and prices increases are keeping a lid on inflation.

That is why many economists believe the Reserve Bank might cut interest rates again. ANZ is predicting the OCR could be cut by another half percent, to 1.75 percent, by the end of the year.

That would be welcomed by dairy farmers facing a sharp fall in farm prices in recent months.

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