IMF praises Govt’s decisive and unprecedented response to COVID-19 crisis

The International Monetary Fund’s (IMF) latest annual review of the New Zealand economy shows the Government’s sound management of the COVID-19 pandemic kept New Zealanders safe and accelerated the recovery, Finance Minister Grant Robertson said.

“The IMF’s ‘Article IV’ report praises the Government’s economic response, calling it timely, decisive, and well-coordinated policy actions.

“The IMF specifically commented that our health policy response proved very effective and the size and scope of our economic support helped avert a much steeper decline in economic activity and employment,” Grant Robertson said.

The IMF warns that despite the improved outlook for the economy, significant risks remain.

“The Government will continue to support business and workers in response to the pandemic, while focusing on accelerating the recovery and addressing critical long term issues, including housing affordability.

“The IMF echoes our concerns around the impact of unsustainable house prices rises on affordability. It notes our plans to overhaul the Resource Management Act and plans to deliver 18,000 public and transitional housing will improve housing supply and affordability.

“The report also acknowledges that a comprehensive policy response should include demand measures to cool demand and tilt the balance in favour of first home buyers. We will have more to say on this in coming weeks and Budget 2021,” Grant Robertson said.

 “We are also substantially boosting investment to fix long-standing infrastructure gaps and help the economy become more productive, sustainable and inclusive. We are investing $42 billion in infrastructure over the next four years, on top of the $25 billion already invested over the past three years.

 “The economic risks highlighted by the IMF also confirms that we need to strike a balance with rebuilding a sustainable economy and maintaining a strong fiscal position.

 “Budget 2021 will include a strong focus on making sure spending continues to be carefully prioritised and targeted at the areas and people that require it the most,” Grant Robertson said.