KEY POINTS:
The Reserve Bank is unlikely to have taken much comfort from the raft of economic data released over the week, economists say.
Although there were tentative signs the economy was starting to go off the boil, the data still meant there would be no let-up in the fight
against inflation.
Likewise, the central bank might have to keep its chequebook open to sell more NZ dollars because there was little in the data to suggest the record-breaking kiwi was going to fall away anytime soon.
From the Reserve Bank's anti-inflation perspective, the week started on a favourable note.
Electronic retail cards spending rose slightly in May but the pace of growth slowed, perhaps reflecting the impact of the banks three 25-basis-point rate hikes so far this year.
The Westpac-McDermott Mil- ler consumer confidence survey showed confidence dropping to its lowest level in a year, again indicating rate hikes were starting to gain some traction.
Even merchandise trade data, which showed only a small surplus in May, was a reflection that the higher New Zealand dollar was starting to bite.
First-quarter current account data showed the deficit eased to 8.5 per cent of gross domestic product from 9 per cent at the end of 2006. The shortfall, however, remains a millstone.
On the more buoyant side of the economic equation, the National Bank's business outlook showed confidence rebounded in June, reflecting the phenomenal success of dairying.
More tellingly, respondents to the National Bank's survey continued to highlight a disconcerting inflationary undercurrent.
The annual rate of inflation is within the central bank's target band of 1-3 per cent, but inflation expectations, which the Reserve Bank takes a keen interest in, continue to linger outside the upper end of the range.
To cap the week off, gross domestic product rose 1 per cent in the March quarter, accelerating from 0.8 per cent growth in the previous quarter.
But Goldman Sachs JBWere chief economist Shamubeel Eaqub said with interest rates having already risen by so much, the economy was slowing.
"There are also indications that suggest inflation pressures will remain quite elevated and the mix of data does not give the Reserve Bank any room to become relaxed just yet," he said. "But things appear to be turning in right direction."
Citigroup economist Annette Beacher said there was plenty in the data to suggest another rate hike was in store. "To me the data just suggests that the tightening cycle is not over," she said.
The NZ dollar, which touched a 22-year post-float high of US$0.7712 moments before the GDP data was released, was trading at $0.7710 on Saturday.