NZ economy strong amid global headwinds

  • Hon Grant Robertson

New Zealand’s economic strength and resilience has been recognised in a major update on the state of the global economy.

The IMF’s latest World Economic Outlook released overnight shows a reduced global growth forecast over the next two years as issues like the US-China trade war and Brexit take hold.

New Zealand is measured alongside a group of Advanced Economies by the IMF. Growth across this group as a whole is expected to be 1.7% in each of 2019 and 2020 – down slightly from six months ago.

“Among this group, New Zealand’s growth forecasts have held steady at 2.5% in 2019, rising to 2.7% next year. This shows we’re in good shape,” Grant Robertson says.

“We know we’re not immune to the global situation. The surplus and low debt give us further opportunities to strengthen the economy.

“Our Economic Plan has led to record infrastructure investment to boost the economy. This includes rebuilding hospitals like Middlemore, building new classrooms, and transport investment in areas neglected for too long, like regional roads and rail.”

The IMF forecasts global growth of 3.0% in 2019 and 3.4% in 2020, down 0.3% and 0.2% from April. These global growth rates are boosted by countries with young demographics like China, India, Vietnam and parts of Africa.

Forecast growth rates for selected economies:
Country 2019 2020
New Zealand 2.5% 2.7%
Australia 1.7% 2.3%
United Kingdom 1.2% 1.5%
Canada 1.5% 1.8%
United States 2.4% 2.1%
Japan 0.9% 0.5%
EU 1.2% 1.4%
Norway 1.9% 2.4%
Finland 1.2% 1.5%
Singapore 0.5% 1.0%
All Advanced Economies 1.7% 1.7%

Source: International Monetary Fund October 2019 World Economic Outlook.