In the latest Business and Economic Research Ltd (Berl) forecasts, Dr Nana said, as was usual for a "committee of economists", the Berl forecasts panel could not conclusively agree on which scenario was more likely.
"Instead, discussions turned to the prospect of a third scenario involving a two-speed economy."
The third scenario arose from the regional impact of further slowing in export performance, delays in the Christchurch rebuild and an incipient surge in activity in Auckland focused on a retail and housing sales recovery.
Regional economies that directly depended on the health of the export sector were beginning to struggle, he said.
While dairy, meat and log prices had been favourable, returns to farmers and forest owners continued to be used to repay debt and consolidate balance sheets rather than invest in improving or expanding business.
Renewed concerns had also been raised that the Chinese and Australian economies might be entering a period of slower growth.
"This is also not good news for regional economies dependent on our export markets."
There was also the overvalued New Zealand dollar to contend with, Dr Nana said.
The high dollar had undermined tourism activity to the extent where foreign exchange receipts from tourists had fallen for four consecutive years, taking the annual total of those receipts to 18% below 2007 levels.
On the positive side, Berl noted the two-speed economy had the Auckland housing market showing significant sign a of overheating, with rising rents reflecting a shortage of housing units, he said.
The rising rents and overheating was a product of the under-building that had been occurring.
Consequently, the pick-up in the number of house sales, as well as the recovery in house prices, was inevitable.
Berl's two-speed economy had modest growth in headline GDP (gross domestic product), employment and retail spending figures. But the reality of the scenario could be a lot more complex, Dr Nana said.
The complexity arose due to monetary and fiscal policy concerns.
Policy direction could be further clouded by renewed oil-price inflation from abroad, adding to the Reserve Bank's conundrum as to when or if to move on interest rates.
"Unfortunately, long-term productivity growth remains overlooked in favour of short-term spending cuts. This is not the export-led recovery that is the preferred outcome of official strategy and rhetoric.
"The potential holding pattern or growth scenario we are facing risks compounding the structural imbalances in the New Zealand economy."
Consequently, the picture of exports growing as a proportion of GDP was lost in the mist and the earlier target of 40% seemed to be similarly lost in the mire, Dr Nana said.
Under the two-speed economy, the national debt imbalance continued to grow - to close to 80% of annual GDP. That would be accompanied by official warnings about the nation's credit-rating status.
"This will be used as justification for more business, central and local government spending cuts and so the circularity continues," he said.
Today, the New Zealand Institute of Economic Research releases its latest quarter survey of business opinion.
Westpac chief economist Dominick Stephens said business sentiment fell sharply in the December quarter survey, held during the depths of market concerns about sovereign debt default in Europe.
"We would expect to see a solid rebound in the March survey in keeping with the monthly business indicators since then."
The Canterbury region had bucked the national trend in the last few quarters, reflecting the anticipation of post-earthquake reconstruction. That was likely to remain the case but Westpac was looking for evidence of a broader pick-up in the building industry.
Pricing and capacity indicators were soft in December, in line with the weak inflation results of the second half of last year.
"We don't anticipate a sustained pick-up in the inflation indicators until reconstruction is well under way and taking a substantial share of the economy's spare capacity, maybe later this year," he said.
Data due
Today
• NZIER quarterly survey of business opinion. Solid rebound in confidence expected.
Tomorrow
• Electronic card transactions.
Spending increase in March expected as food prices move higher.
• REINZ house prices and sales.
Modest rise in sales expected due to low interest rates and shortage of supply in Auckland and Canterbury.
• Performance in manufacturing index, slip in activity expected.
• QV New Zealand housing report.
• ANZ Roy Morgan consumer confidence index likely to show improvement based on housing market.
