Finance minister says El Nino will cut growth
New Zealand fin min Bill English said El Nino could cut 0.3% off GDP.
The Fed has repeatedly blamed snow in the winter for lackluster Q1 growth. What they never mention is that better growth later in the year is due to restrained earlier growth in Q1.
I think a big theme in 2016 will be the Fed overestimating underlying growth because El Nino is going to make it a very mild winter in the US.
In New Zealand's case, English has a better point than the Fed's "it was snowy so people didn't shop" line of thinking. El Nino is causing a drought in New Zealand.
"The Treasury has factored in an impact of 0.3% of GDP, but the final result could be larger," English said.
