Hon Grant Robertson
Minister of Finance
10 October 2018
PĀNUI PĀPĀHO
MEDIA STATEMENT
New global economic forecasts show importance of running surpluses, paying down debt
The International Monetary Fund’s (IMF) latest global economic forecasts are a timely reminder of why the Coalition
Government is running surpluses, sensibly managing debt and focussing on policies to support growth, Finance Minister
Grant Robertson says.
The IMF has upgraded its growth forecasts for New Zealand compared to April, closer to the Treasury’s forecasts. While
this is welcome, the broader IMF World Economic Outlook released today also shows why we need to keep a close eye on
international economic developments.
“The global outlook shows a downward revision in global growth forecasts over the next two years. Global economic growth
of 3.7 percent in 2018 and 2019 is down 0.2 percentage points each year compared to April,” Grant Robertson said.
“The global growth downgrade is largely due to rising international trade tensions and disappointing global activity.
It’s a timely reminder of why the Government is ensuring the books are in order and strong enough to protect the economy
and New Zealanders from any rainy day such as changes in the international economy.
“The IMF has recognised New Zealand’s sound economic fundamentals, with forecasts for growth of around 3% in 2018 and
2019. The upgraded view of New Zealand’s economic outlook follows the IMF’s review of Budget 2018, which included
growth-friendly policies like the R incentive, the Provincial Growth Fund, and record transport infrastructure investment.
“While the IMF’s forecasts are slightly below the Treasury’s, they are strong compared to other advanced economies. The
average forecast New Zealand growth rate over 2018 and 2019 is stronger than forecasts for Australia, the US, the Euro
area, Japan, Canada and the UK,” Grant Robertson said.
In a second report released today, the IMF said New Zealand’s fiscal outlook is positive, and that the Government is
expected to continue running surpluses and controlling debt.
“The IMF’s Fiscal Monitor used New Zealand as an example of good practice for fiscal management. The IMF expects the New
Zealand Government’s financial position to remain better than peers including Australia, Canada, the UK, the US and the
Euro area, while our debt will remain lower than these other advanced economies,” Grant Robertson said.
“The Government financial statements released yesterday confirmed our commitment to sound fiscal management. At the same
time, we are making important investments including significantly increased funding of health, education, housing,
family support and infrastructure.
“It’s important to remember that the Government accounts are for the year ended 30 June 2018, and the
better-than-expected surplus is in part due to one-off factors. Calls for ongoing increases in spending need to keep in
mind that there first needs to be confidence that the better-than-expected results will continue year after year, as
opposed to just being a one-off.
“Due to the IMF’s comments today on the rising risks to the global economy, it’s prudent that we wait until the Treasury
releases its next set of forecasts in mid-December,” Grant Robertson said.
ends