These are uncertain times. It is all too easy to be overwhelmed by the grim economic tidings from around the world. As much of New Zealand returned to work this week, there was little reason for good cheer. Gloomy summer weather during the holiday weather was now being echoed in further grim economic news.
Standard & Poor's downgrade of the debt ratings of nine European nations underlined the fact that circumstances in the eurozone will continue to be fraught for the immediate future. Locally, there was a similarly downbeat message in the Institute of Economic Research quarterly survey of business opinion. This pointed to the New Zealand economy losing momentum and business confidence dimming, partly because of a smaller-than-expected boost from the Rugby World Cup.
The institute said the economy was still growing but its survey implied economic growth of only 1.6 per cent last year and said there was a growing risk of weakness in the first half of this year.
Yet New Zealand's outlook remains considerably better than that of many countries.
For them, there is no suggestion of a pause in recovery. Protracted stagnation is the best-case scenario as their heavily indebted national treasuries struggle to sustain a semblance of growth. Four years after the onset of the global recession, the overhang is proving more difficult to shake than even many of the more pessimistic commentators imagined.
Countries in the eurozone are expected to have little or no economic growth this year. The New Zealand dollar's rapid gain against the euro since November carries its own commentary on their plight.
But it should be remembered that the eurozone accounts for only 15 per cent of the world's gross domestic product. Other regions matter, too, especially for a trading country such as New Zealand. There, the outlook is mixed.
Australia escaped a recession because of its mineral exports to China and India but has not been immune to the shockwaves. Belatedly, Australians seem to have become ensnared in the global trepidation. Indebted households are cutting spending, a factor that has led Michael Hill International to note that the retail environment across the Tasman is more difficult now than it was at the start of the global financial crisis.
It also seems apparent that Asia, particularly China, will slow down, with the growth rate of its exports reducing further as overseas consumers cut spending. The Beijing Government seems to have ruled out any major stimulus packages, such as the one introduced in late 2008 to counter the global crisis. A slowdown could, however, be the right prescription for more balanced growth. And whatever the downside for New Zealand's exporters, this should be kept in perspective. China's annual growth rate remains 8.9 per cent.
There are a few hints from the United States that Americans may finally be beginning to feel more confident. They have been taking on a little more debt after seeing the unemployment rate drop and the economy improve modestly. But this will be the start of a long road back for the US economy and it also cannot be immune from problems in other parts of the world.
These are uncertain times. It is all too easy to be overwhelmed by the grim economic tidings from around the globe. Understandably, the turmoil in Europe has jolted confidence.
But a slow start to the year should not detract too much from New Zealand's relatively favourable position, as evidenced by the continued attractiveness of the dollar to international investors. Indeed, it would be wrong to be writing off 2012 when it has barely started. It could yet be that the glass is half-full.