New Zealand Embassy Tokyo, Japan

IMF backs NZ’s economic, fiscal policy approach

The International Monetary Fund has released its conclusions from its most recent New Zealand mission. The IMF’s statement highlights a number of positive features of the New Zealand economy: Growth prospects have improved for the near term. Business and consumer confidence is strong and commodity prices for key exports remain high. The government’s plan to return the budget to surplus is on track. The macroeconomic framework remains sound and provides policy space to respond to adverse shocks. The flexible exchange rate continues to serve as an important buffer. Growth is now forecast to increase to 3.5% in 2014.

New Zealand Finance Minister Bill English has welcomed the IMF report. “It’s encouraging that the IMF has again noted that our macro-economic framework remains sound and provides policy space to respond to adverse shocks,” Mr English said.

“In particular, it concludes the Government’s focus on returning to surplus next year will help to preserve its favourable standing with external creditors against New Zealand’s background of relatively high net foreign liabilities”, Mr English added.

“I also agree with the IMF that New Zealand faces some risks, including globally from any downturn in the fortunes of China and the rest of Asia, and on the domestic front from issues around housing affordability.

“So this latest report on New Zealand confirms we remain on the right track to build a faster-growing economy and to manage the global and domestic risks that might come our way,” Mr English says. “That’s important if we are to support more jobs and higher incomes for New Zealand families.”

Full Beehive release:

IMF Consultation Concluding Statement:

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