IMF国际货币组织全球-New-Zealand_Selected-Issues_47页_1mb

New Zealand Selected Issues Summary

Core Content

This document, prepared by the International Monetary Fund (IMF) in September 2019, analyzes the interactions between external risks and the New Zealand economy, focusing on three key areas: trade, net migration, and agriculture. It also examines the role of monetary and fiscal policy in response to these risks.

Main Points

External Risks and Linkages

New Zealand, as a small open economy, is highly vulnerable to external risks. The key external linkages include:

• Agricultural exports: Over 13% of New Zealand's GDP is derived from agricultural exports, especially dairy, meat, and fruit.
• Services exports: Tourism and education services are major components, with strong relationships with Australia and China.
• Net migration: A significant source of external demand, particularly from China and Australia, driven by student migration and returnees.

The document uses the ANZIMF model (a version of the IMF's GIMF) to simulate these linkages and their potential impacts.

Spillovers from China's Growth Slowdown

1. Impact on Global Trade: A slowdown in China could lead to a broad-based economic downturn, reducing global demand for New Zealand's exports and affecting its terms of trade.
2. Agricultural Prices: Lower global agricultural prices would reduce the value of New Zealand's agricultural exports, although this might also increase foreign demand for non-agricultural goods.
3. Exchange Rate and Consumption: A real depreciation of the New Zealand dollar would mitigate the impact on exports over time. However, lower agricultural prices and reduced consumption in China would lead to a wealth shock and a weaker real effective exchange rate (REER).
4. Net Migration Effects: A slowdown in China could reduce student migration to New Zealand, thereby decreasing services exports and labor supply. This would amplify the negative impact on the economy.

Spillovers from Australia's Growth Slowdown

• Net Migration Channel: A slowdown in Australia would lead to a decrease in net migration, particularly from Australia to New Zealand, reducing labor supply and increasing wage pressures.
• Trade Impacts: The reduction in Australia's economic activity would affect New Zealand's trade and services exports, leading to lower real GDP growth and a smaller REER depreciation.

Spillovers to the Agriculture Sector

• Global Agricultural Prices: A decline in global agricultural prices would reduce New Zealand's export revenue and impact domestic production.
• Domestic Supply Factors: Domestic supply constraints could have a contrasting effect, potentially leading to higher prices and increased domestic production.

Key Findings

• Fiscal Policy Response: The effectiveness of fiscal policy depends on the instruments used. Two types of fiscal stimulus are considered:
  • Lower Multipliers, Quicker to Deploy: Increased government consumption and a GST rate cut.
  • Higher Multipliers, Slower to Deploy: Increased government infrastructure investment and targeted GST rebates.
• Monetary Policy Constraints: If the Reserve Bank of New Zealand (RBNZ) is constrained by the effective lower bound (ELB) on interest rates, fiscal stimulus would have a more significant impact.
• Fiscal Devaluation: Either fiscal stimulus package would lead to a depreciation of the REER, potentially stimulating the economy through the export channel.
• Leakage to Abroad: In an open economy like New Zealand, a significant portion of fiscal stimulus would be spent on imports, leading to a higher current account deficit.
• Spillovers from Other Economies: Simultaneous fiscal stimulus in Australia and Asia could reinforce the effects of New Zealand's fiscal policy, leading to greater aggregate demand and REER depreciation.

Key Information

• ANZIMF Model: A multi-region, micro-founded general equilibrium model that includes specific sectors for agriculture and services.
• Trade Patterns: New Zealand's trade is heavily influenced by Australia and China, with services exports being more sensitive to Australia and agricultural exports more sensitive to China.
• Fiscal Multipliers: The effectiveness of fiscal policy varies depending on the type of stimulus. Higher-multiplier policies may have more long-term benefits but are slower to implement.
• Monetary Policy: Conducted under a CPI inflation targeting regime, with limited ability to respond if the policy rate hits the ELB.
• Welfare Impacts: The paper also explores the quantification of consumption-equivalent welfare, highlighting the importance of maintaining living standards during economic downturns.

Conclusion

The document concludes that external risks, particularly from China and Australia, have significant spillover effects on New Zealand's economy. These risks affect trade, net migration, and the agriculture sector, with the potential to reduce GDP and consumption. Fiscal policy can be an effective tool to counteract these effects, especially when monetary policy is constrained. The interaction between monetary and fiscal policy is crucial for managing economic stability and promoting growth in the face of global uncertainties.