New Zealand is facing an uncertain but optimistic recovery, a consensus of economic forecasts compiled by the New Zealand Institute of Economic Research says.
Cautions optimism was reflected in modest upward revisions to most main indicators.
Gross domestic product forecasts for the March 2010 year remained flat at -0.4% as the year drew to an end, NZIER economist Shamubeel Eaqub said.
"The economic growth outlook is brighter for 2011 [3.1%, up from 2.8%] and 2012 [3.2% from 3%].
However, views remain mixed."
The forecast range was wide, from a paltry 1.8% to a flourishing 4.1%, he said.
The unemployment rate was expected to peak at 7.2% this month and gradually recede to 6.2% in March 2012.
Sustained high unemployment levels would cap wage growth for the foreseeable future.
A recovering economy was yet to deliver much good news for households.
The exchange rate was expected to be flat on average, but the outlook was widely divergent among forecasters.
Forecasts ranged from reclaiming recent highs to plunging towards historic lows.
The export outlook had brightened, in line with a recovery global economy.
Exports were expected to rise by 2.2% in March this year, up from 0.7% previously.
Forecasts had been revised up for 2011 to 2.7% and 2010 to 5.1%.
Import growth was expected to pick up in line with a domestic economy.
A strong recovery in imports might see the trade balance worsening through the forecast horizon, Mr Eaqub said.
Investment activity was forecast to contract significantly in March but recover in March next year to 6.1%, from 3.8%.
Forecasters trimmed back the residential construction sector recovery but boosted the recovery track for other investment.
Inflation forecasts have moved higher from the December survey but remained within the Reserve Bank's 1% to 3% target band over the forecast period.
Inflation was expected to remain between 2.2% and 2.4% between now and March 2012.
"Forecasters are now mindful of a potential GST increase and a raft of administrative price increases through emissions trading and ACC charges in the 2011 year," Mr Eaqub said.
Real wages were expected to fall through to March 2011 and remain flat through to March 2012.
• Survey respondents were: ANZ-National Bank, ASB, Bank of New Zealand, Deutsche Bank, First NZ Capital, NZIER, Reserve Bank, Treasury, UBS, Westpac. The average forecasts did not necessarily represent the views of individual participants.
