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MICHAEL REDDELL: A few snippets from the IMF WEO

The IMF released its latest World Economic Outlook and associated forecast tables overnight. There is no reason to think the IMF is any better as a forecaster than anyone else (ie not very good at all) but they do look at a bunch of advanced countries all at the same time, against a common global backdrop, so it is still worth looking at how they see things here relative to those other advanced countries. A few charts follow.


(Here, as in various recent posts, I remove from the IMF advanced countries Andorra and San Marino (as too small to matter) and Hong Kong, Macao, and Puerto Rico (as not countries at all), and add in Poland and Hungary, both of which are OECD member countries and performing similarly economically to various central and eastern European countries the IMF includes in their advanced country grouping. That leaves a group of 38 countries, including New Zealand.)


First, we look at the Fund’s forecasts for real per capita GDP growth.


In calendar 2023




and calendar 2024 (I can’t highlight New Zealand – zero growth – but we are fifth from the right)




What about fiscal policy? The IMF has actuals and forecasts for the general government structural balance. We used to be better than most advanced countries. But that was then.




For calendar 2024 alone (for 2023 we are a couple of places less bad). These numbers seem very consistent with the IMF cyclically-adjusted primary deficit estimates in their recent Article IV review of New Zealand.




What of net general government debt?




We do still have government debt as a share of GDP less than the median advanced country, but that gap is closing fast. You’ve heard a lot in this election campaign about the pandemic: other countries had one too.


And what of the current account deficit? There is no right or wrong number for a current account deficit. Huge surpluses or huge deficits can both be symptoms of things going right or wrong. Context matters. In a country with rapid productivity growth and lots of business investment, catching up with the rest of world, really large deficits make sense. That was Singapore and South Korea in their earlier development phases, or 19th century New Zealand.


In 2023, New Zealand doesn’t have the largest deficit as a share of GDP, but it is close. (We had the third largest deficit last year and are still forecast to be second largest next year.)




All in all, it didn’t really make encouraging reading.


Michael Reddell spent 30+ years doing economic analysis and policy advice in a range of institutions, in New Zealand and overseas. Most of that time was at the Reserve Bank, where he ran a number of areas, including a spell as Head of Financial Markets, responsible for monetary policy implementation, foreign reserves management, and the analysis of financial system risks. This post was published at his blog Croaking Cassandra


Commenting on the same issue Rob MacCulloch writes:


Where's our media? Where are the IMF GDP figures out yesterday proving Hipkin's fabricated NZs rank?

On the front pages of the UK Times today it reports the latest IMF growth figures that came out yesterday, on 10th October. Just a few days ago our PM insisted on Mike Hosking's Newstalk ZB show that NZ's GDP growth numbers put us higher then "every country other than Japan". I couldn't work out what he was talking about. In the papers today in NZ I cannot find the IMF figures reported anywhere. So what do they (see link below) say about NZ's ranking. Are we second in the world after Japan, like the PM told Hosking? In 2023 the IMF ranks our GDP growth as 145th our of 173 countries, right near the bottom. As if that isn't bad enough, in 2024 it has put us at 168th, almost AT the bottom. We're still relying on the likes of Equatorial Guinea coming in behind us. Oh, and Sudan. Are the Business Editors at Newshub, Stuff & NZ Herald going to call the PM to account for his false claim on Newstalk ZB that our GDP growth put us ahead of "every country other than Japan"? It was misinformation on steroids. Hipkins is the guy who went berserk about misinformation about the Covid vaccine, yet I cannot conceive of a greater piece of misinformation than telling 5 million Kiwis a few days before a General Election our country is ranked top of the world on GDP growth figures when we're ranked almost bottom. How is he getting away with it?



Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. Rob blogs at Down To Earth Kiwi

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44 Comments


Was the information above sent directly to the Herald business journalist or Murry Kirkness at murray.kirkness@nzherald.co.nz who is the chief content officer? https://www.nzme.co.nz/news/nzme-appoints-murray-kirkness-as-chief-content-officer-publishing/


Because our official office has often sent economic data as well as important public interest information and facts, and he never publishes it. Rather a Herald journo puts their own spin on it and dumbs it down. The board of NZME is a real concern. They all have conflicts in relation to ensuring poor NZ economic performance is not widely reported. E.g. The independent Chair used to head ASB, as well as an insurance company, is a director of Fletcher Building, and Chair of Gensis Energy. They all have elite networks and peer groups that indirectly influence.

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mikefeisst
mikefeisst
Oct 11, 2023

It will never be reported in NZ because it show how totally inept the current government are. And the MSM etc can be identified by the gravel rash all down their left hand sides. If you really want out find out just what is happening in this country you need to look elsewhere NOT sat our local MSM and politically supported groups. You get the impression that all the presenters and reporters (misnomers) are trying to show how knowledgeable they are and to anyone with half a brain and able to think for themselves they are failing dismally.

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lynnsam112
lynnsam112
Oct 11, 2023
Replying to

they are government trash puppets....

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This mob have been playing by the Kremlin manual since 2017 and since 2020 have been on steroids starting with 3 waters Jacinda and her cohorts have been the biggest natural disaster in our history. Wait till she gets into the UN Any predictions?

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mr.max
mr.max
Oct 12, 2023
Replying to

She's a replacement for Klaus Schaub .

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Aaron Shanahan
Aaron Shanahan
Oct 11, 2023

This country used to build things that never needed repairs, and even if they did were able to be repaired because they were Designed to be repaired.

I've been in the industrial electrical field for 35 odd years.

I still repair the old pdl elite variable speed drives, and do so because they are simple, extremely robust and well built, in new Zealand. I will repair anything I get my hands on. But instead of encouraging and nurturing what we used to do here, invest and invent , we've decided that's all thrown in the shit bin of complacency because someone else can produce the same item at a better price.

The manufacturing industry, in new Zealand has given u…


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Replying to

A ggod reminder of times past, I was married in 1970, bought a chest deep freeze two years later, still have it , it sits on the back deck under the roof all on its own. But it still goes, still holds the meat, dog bones, plums, and whatever my wife sticks in it. In all those years it has never been serviced, never stopped, never missed a beat. I reckon it will still be going when im not! . Cheers Aaron.

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Henry Hobson
Henry Hobson
Oct 11, 2023

The only way to have true democracy is having Binding Referendums. Let us give our Party vote to New Zealand First

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harveyandsara
harveyandsara
Oct 11, 2023
Replying to

Where in your wildest dreams do you think Winston is going to give us binding referendums?

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