Faster economic growth forecast

The economy will probably grow 1.5 per cent in the year ending March 31, faster than the 1 per cent pace forecast in the Government's May budget, the Treasury Department said.

The higher forecast reflects an increase in employment and more production from dairy farms, the Treasury said in a report on its website yesterday. The economy grew 2.2 per cent in the year ended March 31, 2006.

New Zealand companies hired 22,000 workers in the second quarter as the jobless rate fell to a record low 3.6 per cent.

Rising employment will boost household incomes and underpin consumer spending, which makes up 60 per cent of the $108 billion economy.