New Zealand: Easing back

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.
In the light of persistent capacity tightness and external imbalance, caution should be exercised in reducing the large fiscal surplus. A slower than planned decline could ease pressure on both interest and real exchange rates, thereby supporting a shift towards more supply-friendly growth led by exports and investment. The rapid increase in public spending should be scrutinised for its efficiency and sustainability.



©OECD Observer No. 264/265, December 2007-January 2008

OECD Economic Outlook No. 82, December 2007
Visit www.oecd.org/newzealand
All OECD Observer articles on New Zealand



Economic data

GDP growth: -1.8% Q1 2020/Q4 2019
Consumer price inflation: 0.9% Apr 2020 annual
Trade (G20): -4.3% exp, -3.9% imp, Q1 2020/Q4 2019
Unemployment: 8.4% Apr 2020
Last update: 9 July 2020

OECD Observer Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Digital Editions

Don't miss

Most Popular Articles

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2020