'It's nonsense' - Former Reserve Bank economist rubbishes Forbes' claim NZ is heading for recession

Source: 1News

A former Reserve Bank economist has labeled claims by Forbes magazine that New Zealand is heading for a recession as "nonsense" and based on a "grab-bag" of unverified ideas.

The article written in Forbes magazine by former Lehman Brothers trader Jared Dillian argues a host of policy changes planned by the Labour-led Government will lead New Zealand into recession.

These include the Reserve Bank reforms, foreign buyers ban and slashes to immigration.

Kiwi economic commentator Michael Reddell said Kiwis should not be "unduly" concerned by the article, which he says was written by someone who doesn't know much about New Zealand at all.

"He seems to have picked up his ideas form a grab-bag of places and not looked at the detail of what the government's proposing," Mr Reddell said of Jared Dillians article.

Mr Reddell did acknowledge a recession may befall New Zealand in the next three years, based off the fact recessions historically occur ever decade and it's been eight or nine years since New Zealand's last.

"If we have one in New Zealand it will probably be because something bad goes on in the rest of the world - something out of Europe, or the China credit thing gives way and we would be caught up in the back wash," Reddell said.

Mr Reddell said most economists were predicting New Zealand's economy to slow next year regardless of which party was elected, and the Labour-led Government's banking reforms and immigration restrictions "won't make that much difference".