A Stable and Sustainable Macroeconomic Environment
Page updated 24 May 2012
Maintaining a stable and sustainable macroeconomic environment is one of the Treasury's three outcomes. Through our work in this area we aim to grow the economy and increase living standards for New Zealanders.
A stable and sustainable economy is an essential precondition for growth. It allows individuals, businesses and the Government to plan more effectively for the future, increases investment and helps to raise productivity. Generally, countries that maintain relatively stable macroeconomic variables such as inflation, unemployment, interest rates, exchange rates, the balance of payments and fiscal aggregates tend to display higher long-term growth rates.
The Treasury contributes to a stable and sustainable macroeconomic environment primarily by:
- Advising on the underlying fiscal and macroeconomic policies and frameworks;
- Providing tax, expenditure and macroeconomic forecasts;
- Reporting on the fiscal position;
- Contributing to debt and financial asset management; and
- Managing the Budget process.
In doing this, the Treasury works closely with agencies such as the Reserve Bank of New Zealand. It also engages with all government agencies to ensure spending and tax policy support a stable and sustainable macroeconomic environment and sustainable fiscal position. International relationships include the OECD and the International Monetary Fund.
How Are We Doing?
The following are useful sources of information on New Zealand's macroeconomic environment:
Economic and Fiscal Updates
At least twice a year, the Treasury produces economic forecasts in its Economic and Fiscal Updates. Information provided in each Update includes forecast movements in gross domestic product (GDP), consumer prices, unemployment and employment, and the current account position of the balance of payments.
The Monthly Economic Indicators (MEI) is a regular stock-take of economic data releases prepared by the Treasury. The MEI comprises a commentary on the major data releases over the previous month and an annex with more detailed charts and source data.
Statement of Long-Term Fiscal Position
In October 2009, the Treasury produced the second Statement of Long-term Fiscal Position, identifying the fiscal pressures likely to eventuate in New Zealand over the next 40 years as a result of factors such as population ageing.
- Statistics New Zealand publishes the New Zealand Official Yearbook, which includes statistics on the New Zealand economy, prices, public sector finance, overseas trade, and money and banking.
- The Reserve Bank of New Zealand publishes statistics for economic indicators including the Consumer Price Index (inflation), exchange and interest rates, external finance, Government finance, and monetary and financial statistics.
Treasury Working Papers and Policy Perspectives Papers are commissioned as part of our core function in developing and providing advice to the Minister of Finance. Many of these papers cover issues related to a stable and sustainable macroeconomic environment and can be found through the Research and Policy Publications section of this website.
Treasury's senior management, including the Chief Executive, regularly attend speaking engagements where they present on topics related to the Treasury's work programme, including a stable and sustainable macroeconomic environment. Notes from these engagements can be found in the Speeches section of this website.