NZ emerges from recession in good shape - IMF

New Zealand has emerged from the global financial crisis in better shape than many advanced countries and it is expected to continue on a gradual recovery path, the International Monetary Fund concludes.


It also supports the Government's fiscal stimulus through to June 2010 and welcomes the Government's longer-term net debt target of 20 per cent of GDP, Finance Minister Bill English says.


"In its concluding statement following its visit to New Zealand this month, the IMF notes that accommodating fiscal and monetary policies are supporting domestic demand.


"It forecasts that real GDP will expand by about 3 per cent in 2010 and 2011, although unemployment is expected to lag the recovery and peak at 7-1/2 per cent this year - before falling back over time."


Mr English says the Budget on 20 May will set out the next steps in the Government's programme of reforms to increase New Zealand's economic growth and help get New Zealanders into higher paying jobs.


"I welcome the IMF's comments that shifting the tax burden from income to consumption would raise incentives to work and invest - increasing growth over the medium term and improving New Zealand's competitiveness.


"We are taking a considered and pragmatic approach to addressing New Zealand's long-standing economic challenges.


"At the same time, we're significantly reducing the amount of extra government spending and demanding better public services from government agencies. We believe we have struck the right balance on this score," Mr English says.


IMF statement: http://www.imf.org/external/np/ms/2010/032910.htm