NZ budget almost shock-proof: IMF

– Another thing to add to the list of reasons why I am here.

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New Zealand is among only a handful of advanced economies where the government’s budget is best placed to deal with “unexpected shocks”, an International Monetary Fund (IMF) report says.

The National government has been criticised by the opposition for increasing debt to fund tax cuts during tough economic times.

But the IMF staff report released yesterday found New Zealand had the second smallest government debt out of the 23 advanced economies it analysed, suggesting the country’s budget would be well-placed to deal with future shocks.

The Washington-based institution examined a country’s “debt limit” based on its historical track record and its current debt level, which it describes as the “fiscal space”.

“Among the advanced economies, Australia, Denmark, Korea, New Zealand and Norway generally have the most fiscal space to deal with unexpected shocks,” the report said.

– More…

– Research thanks to Tony H.

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