English Says N.Z. Jobless Rate Will Peak at About 7% (Update1)

By Tracy Withers


Nov. 4 (Bloomberg) -- New Zealand’s jobless rate will probably peak at about 7 percent some time in 2010, less than the 8 percent the government previously expected, Finance Minister Bill English said.

The unemployment rate is lagging the economic recovery and it will take some time to level off, English said in an e-mailed statement. A report tomorrow will probably show the rate was 6.4 percent in the third quarter, according to the median forecast in a Bloomberg survey.

New Zealand’s economy grew for the first time in six quarters in the three months ended June 30, and the Treasury Department this week said the recovery is likely to accelerate in the second half of 2009. The New Zealand currency’s 25 percent surge against the U.S. dollar the past six months is a “head wind” for exports, English said.

New Zealand’s dollar bought 71.98 U.S. cents at 9.03 a.m. in Wellington trading from 71.82 cents in late New York trading yesterday.

“Clearly the dollar is stronger than we would expect at this point in the economic cycle,” English said in his Focus on Finance statement.

The government’s plan to control public spending and reduce debt will reduce the pressure on the exchange rate, he said.

Lower costs will make exporters more competitive and allow them to take advantage as key global markets show signs of recovery, English said.