Monday, 11 May 2009

New Zealand needs New Productivity

Raising productivity has been identified in an OECD report on New Zealand as the country's greatest medium term challenge. The report analyses New Zealand's economic situation, identifies perceived failings and offers a raft of measures on to how to improve them.

It noted New Zealand's economy was now among the most indebted in the OECD (Organisation for Economic Co-operation and Development) group of 30 industrialised nations.

While a process of debt reduction had started, persistent, large current-account deficits and a high external debt rendered the economy especially vulnerable in the recession. The report suggests that the economy is likely to remain in recession throughout 2009, before recovering "only hesitantly" in 2010 and goes on to say that increased productivity growth is critical for closing the large income gap with other OECD countries, and that government ownership should be reassessed to spur competition in certain sectors.

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