NZ’s economic challenges discussed

Murat Ungor at the University of Otago campus yesterday. Photo: Gregor Richardson
Murat Ungor at the University of Otago campus yesterday. Photo: Gregor Richardson
New Zealand faces significant economic challenges, including with continuing low interest rates and climate change issues, Dunedin academic Murat Ungor says.

Dr Ungor, of the University of Otago economics department, was commenting yesterday at a university symposium, which focused on ‘‘managing in times of extreme interest rates’’.

More than 35 people attended the gathering, which was organised by the Otago department of accountancy and finance, and was held at the premises of the Otago Centre of Sustainability, in Castle St, Dunedin.

The other speakers were Chris McDonald, manager forecasting team, Reserve Bank of New Zealand; Paul Cable, ANZ New Zealand head of interest rate trading; and co-head of funds management, Forsyth Barr Investment Management Craig Alexander.

Symposium organisers said extremely low interest rates had ‘‘become the global norm and are expected to remain low’’.

‘‘New Zealand’s official cash rate of 1% is plumbing historic lows, while some central banks in Europe are operating with negative interest rates,’’ organisers said.

The symposium aimed to address the factors ‘‘precipitating these unusual events and examine what strategies New Zealand firms and New Zealanders more generally should be employing’’, they said.

Dr Ungor has a PhD from the University of Southern California (2010), and worked as an economist at the Central Bank of the Republic of Turkey (2010-15), before joining the Otago economics department in 2016.

New Zealand and other developed nations had previously faced problems with high interest rates, but governments and central banks had since successfully reduced those rates.

However, low interest rates posed challenges, including in New Zealand, and there were some perceived benefits, including by workers, in somewhat higher interest rates.

New Zealand’s productivity was below that of some other nations, including the United States and Australia, and it continued to face economic challenges, including its distance from markets.

New Zealand and other nations also faced big challenges arising from climate change, including the damage which could be done by powerful storms.

The New Zealand Reserve Bank, which is a member of the Network for Greening the Financial System, was contributing internationally, with other central banks, to efforts to counter climate change, he said.

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