The global picture – most economists agree uneven growth continues to be a key characteristic of the long post Global Financial Crisis recovery, which is now ending.The NZ Government's economic programme supported in the recent budget, continues to build a faster-growing economy with more jobs and rising incomes, and to support New Zealand families in need.This programme involves returning to surplus and reducing debt; creating a more productive and competitive economy through a wide-ranging series of micro-economic reforms; embedding a focus on results to ensure better value for money from public services; and continuing to support the rebuilding of Christchurch, Kaikoura, and improving infrastructure throughout New Zealand to support population growth and subsequent demand for services (Transport, Medical and Education).The NZIER Consensus Forecasts shows economic growth holding up at solid levels over the coming years. The New Zealand economy performed strongly over the last year, boosted by immigration and improving household consumption and investment. Forecasters expect growth of approx. 3% in the next 12 months, tapering slightly to 2.9% and 2.8% in the following two years. Strong residential construction activity has been a key contributor to GDP growth, driven by house-building demand in Canterbury and Auckland. As the rebuild in Canterbury nears completion there will be some moderation in residential construction growth. The sharp decline in petrol prices will be a key driver of low inflation over the current calendar year. Beyond that inflation is expected to lift as capacity and international pressures emerge. Although hard to predict, most commodity prices are likely to stay low for the next couple of years.Oil prices and other commodities are staging a slow recovery, hampered by reduced demand and oversupply. At the same time we have an offset from low inflation, particularly through oil prices, that gives us a buffer. The bigger story about what's happening in the global economy, is that there is just not a lot of inflation.We can also expect some shocks from political events, though these tend to have a temporary impact on markets. Financial Markets are fully valued and a correction is expected in the near future. Fund Managers and investors with diversified portfolios, may see a reduction in values and returns for a short period, before returning to more normal rates.

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