N.Z.’s progress ‘pleases’ I.M.F.

Press, 1 October 1983, Page 3

N.Z.’s progress ‘pleases’ I.M.F.

From

G. G. SHAND,

in Washington The International Monetary Fund this ■ week strongly criticised high budget deficits as the main threat to world economic recovery.. However, the Prime Minister, Mr Muldoon, said yesterday that in spite of that he believed the I.M.F. would be “very pleased” with New Zealand’s economic progress. New Zealand is now running a record budget deficit of ?3.2 billion, the type of high internal spending which the I.M.F. this week castigated as the likely stumbling block to recovery. However, Mr Muldoon in-

sisted yesterday that the criticism was more likely directed at the United States deficit which is expected to be more than SUS2OO billion this year. Because the I.M.F. was not at present being used by New Zealand, Mr Muldoon asserted that the organisation had no particular interest in New Zealand’s economy. Although he had not talked to the fund about it, he was sure it would be very pleased with the local progress that had been made.

Meanwhile, Mr Muldoon is not paying too much attention to the latest

revised forecast of New Zealand’s Institute of Economic Research. He said the institute had made two forecasts based on hypothetical assumptions and this had been justifiably criticised at home.

The revised Budget deficit forecast was not based on sound figures because the Government had not even completed its Supplementary Estimates. The institute had to work in the dark, said Mr Muldoon, and so naturally its forecasts were not the most reliable in this area.

He was not being critical in saying this as “by and large” the institute did a good job.