New Zealand: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for New Zealand

New Zealand: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for New Zealand
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Volume/Issue: Volume 2025 Issue 114
Publication date: May 2025
ISBN: 9798229011570
$20.00
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Topics covered in this book

This title contains information about the following subjects. Click on a subject if you would like to see other titles with the same subjects.

Finance , Inflation , Money and Monetary Policy , monetary and financial statistics , FSAP mission , monetary policy easing , consultation cycle , FSAP participation , Housing , Productivity , Inflation , Financial sector stability , Global

Summary

The 2025 Article IV Consultation with New Zealand discusses that tight monetary policy has helped bring inflation back to target after a prolonged period of elevated price pressures, but at the expense of growth. A nascent recovery is underway as monetary policy is easing again. House prices have stabilized, and financial sector risks are contained. is expected to remain within the target band, and current account normalization is set to continue. Risks to the outlook are to the downside, weighing New Zealand’s exposure to trade policy and investment shocks against the potential for stronger monetary policy passthrough. The financial system is resilient with well-capitalized banks, and the ongoing modernization of the regulatory framework should continue. Financial stability considerations should take precedence when determining prudential settings. Structural policies remain a first order priority to address persistently low productivity growth and housing supply constraints. Reforms to improve competition, broaden available sources of funding for businesses, and reduce infrastructure gaps are critical for securing sustainable long-term growth.