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Don't talk the economy down, says Key

NZ Newswire logoNZ Newswire 31/08/2015
Prime Minister John Key © Getty Images Prime Minister John Key

Prime Minister John Key says it's important not to talk the economy down.

He's responding to the latest ANZ Business Outlook report which says firms have become more concerned about the general economic outlook over the coming year.

A net 29 per cent were pessimistic, deteriorating from a net 15 per cent in July.

Mr Key says the survey shows firms are a lot more optimistic about their own prospects than they are about the economy generally.

"There are a range of views, but if you look at what the banks have consistently been saying it's the same as the Treasury and the Reserve Bank," he told reporters.

"They're saying we will grow at a slightly slower rate than we did last year, but they're still predicting positive growth of around two to two-and-a-half per cent."

Mr Key says the ANZ report acknowledges the importance of not "talking ourselves into a funk" and he agrees with that.

"You run the risk of talking the economy down... everyone can see there are potential headwinds in dairy and China, everyone understands there are some issues."

The ANZ report says strong growth over the past couple of years is expected to slow down as slumping global dairy prices erode dairy export receipts, and as the tailwind from the Canterbury rebuild starts tapering off.

Ratings agency Standard & Poor's last week said it anticipates gross domestic product will expand 2.4 per cent in 2016, slowing from a three per cent pace in 2015.

Monday's survey was the fifth monthly decline in business confidence and its second in negative territory, with agriculture the most downcast among the sub-sectors.

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