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The Global Economy and New Zealand

Christian Hawkesby

A speech delivered to the Goldman Sachs Annual Global Macro Conference 2020 in Sydney, Australia
On 29 January 2020
By Christian Hawkesby, Assistant Governor


Tēnā koutou katoa.

Thank you for inviting me to speak at this conference on a topic that is so relevant to a small open economy like New Zealand: the global economy.

Before re-joining the Reserve Bank of New Zealand in March last year, I attended this conference a number of times, so appreciate its role in helping investors consider the global outlook across major regions as the year begins.

As global investors, you are already well-informed on the state of the global economy. But I hope to add value by sharing two main insights:

  • outlining the framework we use at the Reserve Bank to analyse the global economy and its influence on New Zealand, and
  • applying this framework to the developments over 2019, and the risks into 2020.

As our Monetary Policy Committee will begin meeting next week for the first time since November, my remarks will largely focus on how we think about the global economy, and do not represent the formal view of the Committee.

What I would like to illustrate is that our Monetary Policy Committee work like a team, much like you would in an Investment Committee. You follow an investment process to analyse the global outlook for investment opportunities and risks, to make decisions on how to construct your investment portfolios; we analyse the global economy with an eye to the implications for our policy decisions to achieve our dual mandate for inflation and employment. Our full process is set out in the Monetary Policy Handbook...