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Opinion

Does a cash-splashing government need RBNZ support?

Cameron Bagrie
Tue, 25 May 2021

The economy still needs support, but less so compared to three months ago.
Cameron Bagrie
Tue, 25 May 2021
Conjecture may surround the extent to which fiscal policy (the use of government tax and spending policy) is adding to growth, but one thing is clear: the government is spending a lot more money than the Reserve Bank factored into the February Monetary Policy Statement. All else equal, that means less monetary policy support is needed and the Reserve Bank needs to be doing less.The Covid-19 Relief and Recovery Fund (CRRF), in combination with monetary policy, supported the economy during lockdowns and helped springboard the economy up the...

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