New Zealand

On Thursday, Reserve Bank governor Alan Bollard cut the official cash rate to 2.5% from 3%. But the cut, which was widely anticipated following the Christchurch earthquake last month, may be a relatively short-lived one, The National Business Review reported. The Reserve Bank’s forecasts accompanying the decision suggest the economic recovery has been pushed back to the latter part of 2011 but also highlight increased inflationary pressures compared to the previous outlook.

Confidence in the economy has fallen to a two-year low after the Christchurch earthquake, according to the monthly BNZ Confidence Survey, The National Business Review reported. A net 20% of the 456 respondents to the survey expect the economy to get worse over the coming year. This was down from a net 22% expecting improvement in the early February survey and 35% expressing net positive sentiment 12 months ago. It was the worst result since March 2009, when a net 23.2% of respondents expected the economy to get worse.

No New Zealand bookstores will be closed as part of the initial phase of Redgroup Retail’s restructuring, administrators Ferrier Hodgson said today, The National Business Review reported. As a result, there are no redundancies planned in New Zealand as part of this restructure. Redgroup, owned by private equity firm Pacific Equity Partners, has 76 Whitcoulls, five Borders and nine Benetts bookstores in New Zealand. While this is good news for New Zealand Redgroup staff, their Australian counterparts aren’t so lucky.

Unsecured creditors in this country of Australian company Redgroup Retail, whose activities include 90 book stores in New Zealand, were owed $21.5 million when the company went into voluntary administration a fortnight ago, The National Business Review reported. In a presentation to a meeting of New Zealand creditors in Auckland yesterday, administrators Ferrier Hodgson also said entitlements of employees in this country at the time had been $2.1m, with the company having 1171 New Zealand staff.

Administrators of the Australian parent company of New Zealand bookseller Whitcoulls are beginning preparations for a first meeting of creditors, The National Business Review reported. REDgroup Retail is the parent company of Australasian book chains Borders and Whitcoulls, which were put in administration yesterday. REDgroup -- which manages operations in both countries -- called in voluntary administrators, Ferrier Hodgson. REDGroup is controlled by private equity group PEP.

The receivers of Pike River Coal say unsecured creditors owed more than $31 million - including $15 million to tradesmen and almost $3 million to employees - are "unlikely" to be paid, the Otago Daily Times reported. The company was placed in voluntary receivership by its board in December, just weeks after 29 men died in an explosion at its underground mine near Greymouth on November 19. PricewaterhouseCoopers' first report on the receivership outlines a total debt owed to creditors of $110.4 million.

The economy may have suffered a double dip recession, Finance Minister Bill English said, The National Business Review reported. He was speaking at Parliament's finance and expenditure committee, where he also announced that he would deliver the 2011 government budget on Thursday May 19. Following questions from Labour finance spokesman David Cunliffe, Mr English said it was possible the fourth quarter of last year saw an economic contraction.

New Zealand’s unemployment rate rose more than forecast in the fourth quarter, sending the local currency lower and reducing the case for the central bank to raise interest rates in coming months, Bloomberg reported. The jobless rate increased to 6.8 percent from 6.4 percent three months earlier, Statistics New Zealand said today. The median estimate of 10 economists surveyed by Bloomberg News was for 6.5 percent. The New Zealand dollar fell to 77.41 U.S. cents at 1:11 p.m. in Wellington from 77.76 cents before the data.

Christchurch finance company Finance & Leasing says its inability to meet the new Reserve Bank capital ratio requirements has forced it into receivership – and that it's not the only company in that position, Stuff.co.nz reported. Director Kipp Alexander said the company had remained solvent throughout the financial crisis and recession, but because it could not meet the requirements in time, it could not obtain approval from the Companies Office for its prospectus extension, which was lodged in December.

New Zealand likely avoided a recession last year due to a recovery in business confidence led by exports, consumer spending and construction, economists say. A net 8 percent of companies surveyed expect the economy will improve over the next six months, up from 6 percent in the third quarter, the New Zealand Institute of Economic Research said today in Wellington, Bloomberg reported. Home-building approvals rose 8.8 percent to a four-month high of 1,268 in November, Statistics New Zealand said in a separate report.