Academic journal article The Reserve Bank of New Zealand Bulletin

NZ Needs to Be Ready for Recovery

Academic journal article The Reserve Bank of New Zealand Bulletin

NZ Needs to Be Ready for Recovery

Article excerpt

30 January 2009

New Zealand will be better prepared for economic recovery if households, firms and banks do not "pull down the shutters", Reserve Bank Governor Alan Bollard said today.

Dr Bollard told the Canterbury Employers' Chamber of Commerce the economy is in the middle of a major international shock that is developing from financial turbulence into economic recession.

"Households, firms and banks will naturally be very cautious during this process. However, we should also be watchful for the opportunities, and mindful of the risks of defeatism. Within the Western world, New Zealand's economy and financial system are relatively well placed to weather the adjustment."

Dr Bollard said that past recoveries have occurred suddenly and strongly, and New Zealand needs to remain well positioned for such a recovery. "This has been New Zealand's experience in the past. Households and firms should not pull down the shutters, and banks should continue to lend on sound business propositions."

Dr Bollard said large underlying structural adjustments are under way internationally. …

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