If Bill English runs deficits over the next year to stumulate the economy he willbe contradicting the Rsereve Bank.
The economy technically pulled out of recession in the second quarter, snapping a five-quarter streak of contractions and the longest downturn since the recession caused by the first oil shock in the mid-1970s.
Earlier this month, the Reserve Bank of New Zealand kept the official cash rate at 2.5% but signaled it would start raising interest rates in mid-2010 rather than the previous guidance of the second half of 2010 if the economy continues to recover. The central bank had expected the economy to expand 0.4% in the third quarter.
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