New Zealand: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for New Zealand
IMF Staff Country Reports, August 28, 2023
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- New Zealand: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for New Zealand
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Bibliographic details
- Published: August 28, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400251986.002
Executive summary and economic outlook
- New Zealand’s economy is in the midst of a necessary, policy-induced slowdown following the strong post-pandemic recovery.
- With exemplary management of the pandemic, New Zealand recovered faster than most other advanced economies.
- The economy is expected to continue on its slow growth as monetary tightening takes hold.
- The bulk of the impact of the rate hikes will be felt in 2023 and 2024 given the usual lags in transmission.
- Inflation will likely decline but remain above target in 2024, with new discretionary spending adding to pressures.
Risks to the outlook
- External environment risks and a potential need for stronger tightening of monetary and financial conditions.
- Global developments relating to growth, deepening geo-economic fragmentation, and financial stability shocks can significantly alter the baseline assumptions for New Zealand.
- Risks stem mainly from policy missteps, housing market developments, and global spillovers.
Key policy-relevant findings
- Current economic outlook reflects monetary policy tightening as the primary mechanism to slow demand and reduce inflationary pressures.
- A stronger tightening of monetary and financial conditions may be required depending on developments in inflation and the external environment.
- New discretionary spending would add to inflationary pressures and complicate monetary policy objectives.
Subjects and keywords
- Subject: Climate change, Environment, Housing, Housing prices, Inflation, International organization, Monetary policy, Monetary tightening, National accounts, Prices
- Keywords: authorities project real GDP growth, Climate change, CPI data, Global, Housing, Housing prices, Inflation, labor market tightness, monetary policy mix, Monetary tightening, money market rate, Pacific Islands, policy agenda, stats NZ
International Monetary Fund. New Zealand: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for New Zealand (August 28, 2023).
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