WELLINGTON, Sept. 17 (Xinhua) -- Economists are expecting New Zealand's recovery to be long and protracted, with weakening exports and low spending levels, according to an average of forecasts from banks and economic agencies out Monday.
Economic growth would average 2.6 percent over the next three years, with the rebuilding of the earthquake-stricken Canterbury region a key driver of activity, while households and exports would "contribute modestly," said the Consensus Forecasts report from the independent New Zealand Institute for Economic Research ( NZIER).
Growth in new jobs would be solid but unspectacular, and wages would also grow at a moderate pace, it said.
"Global risks have risen. Exports will be weaker as global demand softens. Forecasters now expect the exchange rate to be higher for longer."
The slow recovery would restrain inflation, keeping the Reserve Bank of New Zealand (RBNZ) interest rate at its historic low of 2. 5 percent until late 2013.
Tax revenue was forecast to fall, and economists predicted the government would miss its target of returning to fiscal surplus by 2015.
The New Zealand dollar, sitting at 83 U.S. cents Monday, would remain around its current high level for the next three years.
"Exporters should plan for weak demand and a high exchange rate for some time. A high exchange rate will favor imports," it said.
Consumer price inflation would remain within the RBNZ's 1 percent to 3 percent target band over the next three years.
Forecasters expected inflation to average 2.3 percent over the next three years, sitting at 1.8 percent next year before picking up towards 2.5 percent in 2014 and 2015.
"Public consumption will barely grow over the next three years. This reflects the government's ambition to return to surplus by constraining spending."
Despite being in fiscal deficit, government borrowing costs would remain low.T The Consensus Forecasts were compiled from the forecasts of seven major banks, the RBNZ, the NZIER and the New Zealand Treasury.