Economy

Central banks have almost run out of options on how to help stave off the latest volatility in world economies, BNZ senior economist Craig Ebert says.

The New Zealand dollar continued its acceleration to hit a new record against the US dollar yesterday as overseas investors' appetite for risk increased, including their exposure to higher-yielding currencies.

New Zealand's financial system is more resilient and positioned to support economic growth, but still faces a volatile and uncertain environment, Reserve Bank governor Alan Bollard says.

The Otago-Southland services industry appeared to have had a major bounce in activity last month, but caution is being advised against reading too much into the latest figures.

The prolonged weakness in the US and Europe may be the least of Asia's troubles in 2011, economists say, as the region fights potentially destabilising inflationary pressures.

Finance Minister Bill English yesterday continued to talk up the prospects of an economic recovery despite evidence the recovery stalled in the middle part of this year.

Business New Zealand is cautioning against reading too much into an improvement in an index of economic conditions it compiles, arguing it may not reflect reality because of the quality of statistics it monitors.

Europe's efforts to contain its debt crisis have come under increasing strain as bond market jitters shook Portugal and Spain, seen as the 16-nation eurozone's next weakest links now that Ireland has followed Greece by accepting a massive international rescue.

The inability of the international community to develop meaningful solutions to global issues is largely attributable to a conundrum known as the "prisoner's dilemma", suggests Peter Lyons.

New Zealand ranks third in the Economic Freedom of the World, 2008 survey.