Earlier this month the Reserve Bank released its updated forecasts in its Monetary Policy Statement.

Quite predictably the bank - as shown in this graph - is forecasting economic growth to take a hit this year, as activity is disrupted by the February 22 earthquake and the rebuild of Christchurch is delayed.

However it is forecasting that growth will rebound strongly in 2012 – hitting 5 per cent by the end of the year - and despite some inflationary pressures from the Christchurch rebuild, the interest rate cycle will be relatively subdued.

The bank is projecting that 90-day rates will lift gradually to 4.6 percent by 2014 – a low peak compared with the last cycle, where the official cash rate reached almost double that figure.

That forecast combination of high growth and moderate inflation would be good for the economy and our export industries.