RBNZ’s Bollard on international and domestic risks in 2011

Alan Bollard, the governor of the Reserve Bank of New Zealand, on Friday said a number of international and domestic risks meant economic developments in New Zealand during 2011 remained uncertain.

At the Canterbury Employers' Chamber of Commerce in Christchurch, New Zealand, Bollard said: "The forecasts for the year are crucially dependent on a number of international risks. A number of large economies have faced very unusual conditions as they emerge from the global financial crisis, and this has resulted in high uncertainty."

Bollard said a weak US recovery, the risk of sovereign defaults in Europe, the emergence of a bubble in emerging markets and the possibility of a commodity boom were all significant risks that could play out 2011. Bollard also identified several key risks and drivers to New Zealand's growth path on the domestic front. He said New Zealanders' incentive to save, the continued fragility in financial markets, the emergence of a construction boom and the outcome of the Rugby World Cup taking place in New Zealand in September were all key risks to the recovery.

Click here to read the speech