## New Zealand: Selected Issues

_IMF Staff Country Reports, May 14, 2024_

## Source details

**Canonical URL:** [New Zealand: Selected Issues](https://www.imf.org/en/publications/cr/issues/2024/05/14/new-zealand-selected-issues-548968)

## Other formats

- [Markdown version](/en/publications/cr/issues/2024/05/14/new-zealand-selected-issues-548968/index.md)
- [Structured JSON version](/en/publications/cr/issues/2024/05/14/new-zealand-selected-issues-548968/index.json)
- [Bundle manifest](/en/publications/cr/issues/2024/05/14/new-zealand-selected-issues-548968/bundle-manifest.json)

## Bibliographic details
- Published: May 14, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400275302.002

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### Research questions and hypotheses
- Investigates why New Zealand’s inflation is higher and further from target than comparator economies.
- Tests two main hypotheses:
  - (1) the persistence of pandemic era shocks;
  - (2) strong migration inflows fuelling demand.

### Identified drivers of higher inflation
- Common drivers across many advanced economies:
  - expansionary fiscal and monetary policy;
  - high global commodity prices;
  - exchange rates;
  - high maritime transport costs.
- New Zealand-specific factor:
  - the delayed reopening of the economy likely caused a postponed demand shock relative to similar economies.
- Dynamics:
  - results show that the impact of these shocks decay rapidly over time, suggesting positive short-term inflation dynamics.

### Migration: short-run effects
- Large migration waves are associated with short-run increases in inflation.
- Magnitude and persistence:
  - these inflationary effects are relatively modest;
  - these effects are no longer significant after four years.

### Migration: long-run effects
- Long-run dynamics show evidence that migration can lead to significant long-term gains to:
  - productivity;
  - output;
  - capital growth.

### Interaction with labor market conditions
- Countries with tight labor markets exhibit similar patterns to those without tight labor markets.
- Difference in timing:
  - in tight labor markets, the inflationary effects of migration dissipate faster.

*Source: New Zealand: Selected Issues, IMF Staff Country Reports No. 2024/123, May 14, 2024.*

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## Content in this bundle

- **New Zealand: Selected Issues; IMF Country Report No. 24/123; April 23, 2024**
  - [New Zealand: Selected Issues; IMF Country Report No. 24/123; April 23, 2024 (Markdown version)](/-/media/files/publications/cr/2024/english/1nzlea2024002.pdf.md){rel="alternate" type="text/markdown"}
  - [New Zealand: Selected Issues; IMF Country Report No. 24/123; April 23, 2024 (PDF)](/-/media/files/publications/cr/2024/english/1nzlea2024002.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2024/05/14/new-zealand-selected-issues-548968_