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© 1999 International Monetary Fund

September 1999

IMF Staff Country Report No. 99/103

New Zealand: Staff Report for the 1999 Article IV Consultation

This report was prepared by a staff team of the International Monetary Fund following discussions with the officials of New Zealand on economic developments and policies. The report was then considered by the IMF’s Executive Board in the context of the IMF’s periodic consultation with New Zealand, as required under Article IV of the IMF Articles of Agreement. The views expressed in the staff report itself are those of the staff team and do not necessarily reflect the views of the Executive Board of the IMF or of the authorities of New Zealand; a supplementary statement by IMF staff may also be included. The views of the Executive Board as expressed in the discussion of the Article IV consultation report and as summarized in a Public Information Notice (PIN) are also included. In addition, a statement by the member country authorities may be appended. Further background documentation prepared by IMF staff for the consultation may be published separately at a later date. The policy of publication of Article IV staff reports allows for the deletion of market sensitive information.

This Article IV staff report is published—both in hard copy and on the IMF’s website (—as part of a pilot project. To assist the IMF in evaluating the pilot project for release of Article IV staff reports, reader comments on the staff report are invited prior to October 5, 2000, and may be sent by e-mail to

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Staff Report for the 1999 Article IV Consultation

Prepared by the Staff Representatives for the 1999 Consultation with New Zealand

Approved by Wanda Tseng and Thomas Leddy

August 2, 1999

  • The 1999 Article IV consultation discussions were held in Wellington during May 31-June 8, 1999.

  • The mission team consisted of Messrs. Ostry (Head), Aziz, Lee, and Sarel (all APD). Mr. Woolford (Advisor to the Executive Director for New Zealand) attended some of the meetings.

  • The mission met with Treasurer Birch, Reserve Bank Governor Brash, Treasury Secretary Bollard, senior government officials, and private and financial sector representatives.

  • New Zealand has accepted the obligations of Article VIII, Sections 2, 3, and 4, and maintains an exchange system that is free of restrictions on the making of payments and transfers for current international transactions.

  • New Zealand publishes an array of high-quality statistics. Balance of payments financial account data, however, are published only after a lag of more than one year, although the timeliness and frequency of such data are being upgraded.

  • The principal author of this staff report is Mr. Ostry.


  • I. Executive summary

  • II. Introduction

  • III. Recent Economic Developments and Outlook

  • IV. The Policy Discussions

    1. Near-Term Macroeconomic Policies

    2. External Sector Issues

    3. Long-Term Fiscal Issues

    4. Structural Reform and Productivity Growth

  • V. Staff Appraisal

  • Text Boxes

  • 1. Household Saving in New Zealand

  • 2. Modifications to the Reserve Bank’s Operating Framework

  • 3. New Zealand: External Exposure

  • 4. Productivity and Potential Growth

  • Figures

  • 1. Selected Real Economic Indicators, 1994–1999

  • 2. Monetary and Financial Indicators, 1994–1999

  • 3. Balance of Payments and External Indicators, 1994–1999

  • 4. Fiscal Indicators, 1993/4–1999/2000

  • 5. Labor Market and Inflation Indicators, 1994–1999

  • Tables

  • 1. Selected Economic and Financial Indicators, 1995–2000

  • 2. Balance of Payments and External Debt, 1994–1999

  • 3. Central Government Budget, 1994/95–1998/99

  • Annexes

  • 1. Medium-Term Scenario

  • 2. Fund Relations

  • 3. Statistical Issues and Y2K Readiness

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August 30, 1999

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Public Information Notice (PIN) No. 99/89


September 15, 1999

International Monetary Fund

Washington, D. C. 20431 USA

New Zealand: Staff Report for the 1999 Article IV Consultation
Author: International Monetary Fund