Combined with concerns regarding the sustainability of growth in China and the recovery of the labour market in the United States, the general outlook for the global economy has softened. However, global jitters have not been enough to derail confidence in the New Zealand economy.

Business and consumer confidence remain elevated, while record high commodity prices are providing a much-needed boost to rural incomes. Overall, Infometrics expect the positive domestic outlook to convince the Reserve Bank to lift rates by at least 100 basis points during the second half of 2010.

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