New Zealand is finally emerging from its five-quarter long recession, the beneficiary of strong domestic and global policy stimulus. Recent indicators, notably improving business production expectations and retail sales, suggest that the third quarter is on track to register modest positive growth. But the recovery could be hampered by the overhang of high private sector indebtedness, ongoing credit contraction, the currency’s recent strength and rising unemployment. Unemployment is rising markedly and, as a lagging indicator, will continue to do so. This may hold down incomes and, along with the need to unwind the burden of household debt, raise the propensity to save.

Ministers responsible for employment from around the world gathered at the OECD on 28-29 September to discuss the jobs crisis. In our eighth OECD Observer ministers' roundtable, we ask six representatives, from Canada (co-Chair), Italy (co-Chair), Sweden (vice-Chair), France, New Zealand, and Chile, which is a candidate for OECD accession: What new policy actions are you taking to improve the jobs situation in your country?

On 27 May 1882, The Times newspaper proclaimed, "Today we have to record such a triumph over physical difficulties, as would have been incredible, even unimaginable, a very few years ago". They weren't talking about Queen Victoria avoiding a recent assassination attempt by a poet she'd annoyed or Jesse James having less luck with a friend he'd trusted. They were talking about sheep meat.

The global crisis hit New Zealand just as it was undergoing a difficult domestic adjustment. The multiple blows of housing market correction, collapsing world trade, rising risk spreads, tighter credit conditions and unsustainably high private-sector debt suggest a recession of atypical length.

New Zealand has entered recession ahead of other OECD countries, a victim of simultaneous domestic and foreign shocks. The outlook remains subdued because the large macroeconomic imbalances built up over the past decade–inflation, housing overvaluation, high household debt and a huge current account deficit–will take some time to unwind.

The United Nations Framework Convention on Climate Change Conference in Bali in December 2007 was high in political stakes as well as emotion. But did it produce a result and what more might be done? New Zealand’s climate change ambassador offers his views.

Activity so far in 2007 has picked up markedly in a context of unprecedented high prices for New Zealand’s major commodity exports, maintaining pressure on resources and inflation. Monetary conditions have been tightened, while domestic risk spreads have widened in conjunction with the international financial market turbulence. These factors should cause growth to slow over the near term, allowing a moderation of inflation and eventual monetary easing.