Finance Minister Grant Roberston says New Zealand is in a good position to grow the economy. Photo: RNZ / Angus Dreaver
Finance Minister Grant Roberston says there is an opportunity for the economy to thrive in the face of global challenges.
At a business breakfast this morning, Robertson made his case for why he was optimistic about the country's outlook, despite the effects of high inflation, rising interest rates and slowing growth on the world stage.
"As New Zealand looks positively to summer, much of the world turns towards a hard winter," Robertson said.
"We welcome back our tourists, our migrant workers and our international students, as the clouds begin to darken over our friends elsewhere in the world and the marketplaces we export to."
He said much of the world was experiencing a spike in energy prices following Russia's invasion of Ukraine, supply chain disruptions and skills shortages.
The Chinese economy was slowing, one forecast suggested inflation could hit 18 percent in the United Kingdom and there were growing fears that inflation in the United States was becoming entrenched.
New Zealand was in a much better position by comparison, Robertson said.
Demand for key exports remained strong, median household earnings were growing, headline inflation was below that of other OECD members and the country's green energy credentials were attracting international investment, he said.
"This includes the likes of Amazon, which is setting up a multi-billion-dollar cloud investment here, following in Microsoft's footsteps."
Robertson acknowledged the persistent labour shortages that businesses were facing but said there were signs of "green shoots".
This included 7,200 businesses receiving approval to recruit staff internationally and more than 25,000 overseas visitors being granted working holiday visas since March.
Robertson said the government's economic plan was built on creating a high wage, low emission economy that was resilient to different economic cycles.
He said government spending would be dialled down and become more targeted after it injected $20 billion into the economy to ease the pressures on businesses during the initial stages of the pandemic.
"This tighter period will require some tough choices. At a broad level, my focus will continue to be on making sure New Zealand maintains responsible debt levels and ensuring our path back to surplus."
But he ruled out any austerity cuts, saying this would create more harm than good.
Robertson's speech was made ahead of the release of gross domestic product figures for the three months ended June.
Gross domestic product rose 1.7 percent in the three months ended June after the surprise contraction in the first quarter, with the annual growth rate easing to 1 percent.