Our recent Monetary Policy Statement (MPS)8 outlines that New Zealand has been in the relatively fortunate position of having dealt swiftly with the initial COVID wave. This health outcome, combined with the economic policy response, has seen domestic activity pick up.
Against this background, it is crucial that the social partners continue to meet their responsibilities, in particular in the context of a more favourable environment for economic activity and employment. As regards medium to longer-term prospects for price developments, the monetary analysis continues to point to upside risks to price stability.