Fitch ratings agency’s warnings of the worsening economic outlook is yet another signal that National needs to diversify the economy and take action to prepare New Zealand for a volatile year ahead, says Labour’s Finance spokesperson Grant Robertson.
“It hasn’t been a good start to the year for the economy. Dairy prices are sliding again, international markets have plunged and the Government’s books are heavily in the red.
“Now Fitch rating agency has revised our near term growth prospects downward because of declining prices for dairy exports. That shows just how over-reliant this country is on the dairy industry.
“The high levels of debt in the dairy and housing sectors have even led Fitch to lower the outlook for the banking sector to negative, echoing concerns expressed by our Reserve Bank Governor.
“New Zealand needs a more diversified economy to help insulate us from major commodity shocks. We need to invest in job rich industries and support companies to move up the value chain. We can also bring forward projects to stimulate the economy. Despite more than a year of warnings as dairy prices have plummeted there has been no real effort from the Government to do this.
“With yesterday’s Government books showing a widening deficit it’s clear that National’s fiscal and economic management needs to take a big step up,” says Grant Robertson.