Press Release: Statement by IMF Managing Director Rodrigo de Rato at the Conclusion of his Visit to New Zealand

June 19, 2006

Press Release No. 06/135

Mr. Rodrigo de Rato, Managing Director of the International Monetary Fund (IMF), issued the following statement on June 16, at the conclusion of his visit to New Zealand:

"I am delighted to have had this opportunity to make my first visit to New Zealand. I have had the pleasure to meet with Prime Minister Helen Clark, Finance Minister Michael Cullen, and Ministers Trevor Mallard and Clayton Cosgrove. I also had the chance to meet Reserve Bank of New Zealand (RBNZ) Governor Alan Bollard and Secretary to the Treasury John Whitehead, as well as representatives of the business and academic communities.

"After a long period of strong growth, which eventually put pressure on prices and widened the external current account deficit, the New Zealand economy is now slowing. The recent decline in the exchange rate will facilitate the needed rebalancing and contribute to a recovery in growth. The restoration of strong growth will also be aided by the authorities' sound macroeconomic management. Indeed, New Zealand pioneered inflation targeting and principles for enhancing fiscal responsibility, and the IMF has often cited these monetary and fiscal policy frameworks as being good examples for others to follow.

"New Zealand's unemployment rate of just under 4 percent is low compared with other advanced economies, with flexible labor markets combined with an effective social safety net, which may also hold lessons for other countries. I fully support the priority the authorities attach to strengthening productivity growth.

"During my visit, I had a fruitful exchange of views with the authorities on how to reshape the IMF so it can better help countries meet the opportunities and challenges posed by increased globalization. In this context, I reviewed with the authorities how the IMF proposes to implement its Medium-Term Strategy, and I discussed how best to address critical issues such as enhancing governance of the institution so that the changing relative weights of countries in the world economy are better reflected in their voice in the IMF. I greatly value the discussions we have had. The authorities' advice will help the IMF to advance implementation of its Medium-Term Strategy, and will also aid in the preparations for the forthcoming IMF Annual Meetings in Singapore this September."


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