7 Oct 2016

Global economic downturn can be avoided - English

4:28 pm on 7 October 2016

Finance Minister Bill English says he is reassured that a severe downturn in the global economy can be avoided, despite concerns from the International Monetary Fund and the World Bank.

Bill English at a social housing announcement in Northcote

Finance Minister Bill English Photo: RNZ / Cole Eastham-Farrelly

Both organisations say weak growth, widening inequality and record global debt levels have left countries vulnerable to a fresh financial and economic crisis.

But after discussions at meetings with both groups in Washington, Mr English expressed more optimism.

"It's a bit less likely than it was that we see some extreme financial shock that would really knock New Zealand's growth path around. I get the sense that there is more clarity about how the financial system is going to move out of these extraordinary circumstances, back to something normal. It might be a bumpy ride, but looks manageable."

He said there was a recognition that printing money and setting negative interest rates were not generating enough growth, and policies such as more government spending were needed.

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