New Zealand: Staff Report for the 2012 Article IV Consultation—Informational Annex

The New Zealand economy continues to grow at a modest pace. The 2012 Article IV Consultation reports that domestic demand has remained soft as households and businesses continue to deleverage amid a weak housing market and an uncertain outlook. Executive Directors endorse that output growth should pick up somewhat in 2012 as earthquake reconstruction spending is expected to gain pace. High household debt is likely to weigh on the growth of private consumption as households will need to save to strengthen their balance sheets.

Abstract

The New Zealand economy continues to grow at a modest pace. The 2012 Article IV Consultation reports that domestic demand has remained soft as households and businesses continue to deleverage amid a weak housing market and an uncertain outlook. Executive Directors endorse that output growth should pick up somewhat in 2012 as earthquake reconstruction spending is expected to gain pace. High household debt is likely to weigh on the growth of private consumption as households will need to save to strengthen their balance sheets.

ANNEX I. FUND RELATIONS

(As of March 31, 2012)

I. Membership Status: Joined: August 31, 1961; Article VIII

II. General Resources Account:

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III. SDR Department:

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IV. Outstanding Purchases and Loans: None

V. Financial Arrangements: None

VI. Projected Obligations to Fund: None

VII. Exchange Arrangement:

New Zealand accepted the obligations of Article VIII on August 5, 1982. The New Zealand dollar has floated independently since March 1985 and the de facto exchange rate arrangement is free floating. New Zealand maintains an exchange system that is free of restrictions on the making of payments and transfers for current international transactions, other than restrictions notified to the Fund in accordance with Decision No. 144-(52/51).

VIII. Article IV Consultation:

New Zealand is on the 12-month consultation cycle. The 2011 Article IV consultation discussions were held during March 11–22, 2011; the Executive Board discussed the staff report (IMF Country Report No. 11/102) and concluded the consultation on May 9, 2011.

IX. FSAP Participation and ROSCs:

FSAP mission took place during October 30–November 18, 2003. The FSSA and the Detailed Assessments of Observance of IOSCO Objectives and Principles of Securities Regulation and FATF Recommendations for Anti-Money Laundering and Combating the Financing of Terrorism were published under Country Reports No. 04/126, No. 04/417, and No. 05/284, respectively.

X. Technical Assistance: None

ANNEX II. STATISTICAL ISSUES

Data provision is adequate for surveillance. The authorities are continuing to enhance data quality and expand the range of data available, including a project led by the Reserve Bank of New Zealand to publish data consistent with the Monetary and Financial Statistics Manual 2000 (MFSM 2000). Given New Zealand’s high level of external indebtedness, the publication of up to date institutional sector and flow of funds accounts would be an important addition to the current suite of statistics. It is recommended that the authorities subscribe to the IMF’s Special Data Dissemination Standard.

Table of Common Indicators Required for Surveillance

(As of May 9, 2012)

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Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.

Foreign, domestic bank, and domestic non-bank financing.

The general government consists of the central government (including budgetary, extra budgetary, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I); Not Available (NA).

New Zealand: 2012 Article IV Consultation: Staff Report; Staff Supplement; Public Information Notice
Author: International Monetary Fund