New Zealand is not alone in these experiences: all major central banks now see price stability as their main objective and the most important contribution they can make to stronger long-term economic performance. While much has been achieved in these first 25 years of the Reserve Bank Act, important issues and challenges remain.
The global economic environment remains difficult, we have experienced rapid increases in house prices, and we face the longer-term need to improve domestic productivity and savings and rein in the economy’s external imbalances.