ECONOMIC ANALYSIS HELD SATISFACTORY

Press, Volume CIV, Issue 30939, 21 December 1965, Page 3

ECONOMIC ANALYSIS HELD SATISFACTORY

(New Zealand Preet AetociaUon) WELLINGTON, Dec. 20. Predictions by the Institute of Economic Research in a recently published analysis of New Zealand’s economy were today cited by the Minister of Finance (Mr Lake) as confirming that the Government’s economic policies were achieving the desired results.

Commenting on the institute’s December report, he said the outstanding features of the predictions were that the gross national product was expected to rise again by 7 per cent this coming March, that export ipcome would rise again this year and that much the same rate of growth would continue in the 1967 year with a much reduced balanee of payment! deficit. “These satisfactory predictions rest on the assumption that the Government will con-

tinue its existing policy of restraining demand. “Such an assumption by the institute is fully justified," said the Minister. Mr Lake said New Zealand continued to enjoy unprecedented prosperity and all resources of capital and labour were fully employed. “It is essential therefore to ensure effective demand does not outstrip the productive capacity of our resources.,” be said. The Minister said accordingly the aims of the Government’s present policies provided for:

Increased production to earn a higher export income. A gradual dampening down of internal demands with a consequent decline In demand for imports. The use of IMF. and other resources until the operation of the preceding two factors resulted in a better internal balance and improvement In external accounts. The Minister Mid the predictions of the Institute of Economic Research suggested precisely that the above aims were likely to be achieved if the Government continued steadily on its present course. “Coming as it does from an Independent group of economic experts, this appraisal Is a particularly valuable affirmatlon of the correctness of the Government’s own appreciation of .the economic outlook and of the policies we are following. “The cynics mentioned by the Institute will be disappointed if they think the Government la going to relax during 1966 merely because it is election year," he Mid,