1. Question No. 1—FinanceKIRITAPU ALLAN (Labour) to the Minister of FinanceORAL QUESTIONSQUESTIONS TO MINISTERSQuestion No. 1—Finance1. KIRITAPU ALLAN (Labour) to the Minister of Finance: What recent reports has he seen on the international context for the New Zealand economy?SPEAKER: Order! Before the member goes on I'll ask the members who are responsible for the—[Branded folder removed from lectern]Hon GRANT ROBERTSON (Minister of Finance): Overnight the International Monetary Fund (IMF) revised down its forecast for global growth highlighting the risks facing the New Zealand economy from the global recession caused by COVID-19. The IMF cut its global growth forecast by 1.9 percentage points to negative 4.9 percent in the calendar year 2020. For advanced economies it also cut its forecast by 1.9 points to negative 8 percent. The IMF also revised down its expectations for global growth in 2021 by 0.4 percentage points to 5.4 percent. These revisions update forecasts made by the IMF in April and they highlight how quickly the global economic situation is evolving as different countries take different approaches to dealing with the COVID-19 pandemic.Kiritapu Allan: Why did the IMF revise down its global growth forecasts?Hon GRANT ROBERTSON: The IMF said its weaker global forecasts reflected lower consumption in most economies than previously expected. This was due to the disruption caused by continuing social distancing measures and lockdowns in countries that still require these measures to get on top of COVID-19. The IMF has also said that investment in these countries is expected to be subdued further as firms defer capital expenditure amid high uncertainty around the pandemic. The IMF also provided an alternative scenario of what might happen to global growth if there were a second wave of infections around the world—in this scenario global growth in 2021 would be 4.9 percentage points lower than its new base scenario essentially knocking off all of the global recovery for that year. This emphasises the advantage New Zealand has from coming into COVID-19 with a strong fiscal position some of the lowest public debt in the world historically low unemployment and a growing economy.Kiritapu Allan: How is New Zealand positioned to deal with the global recession caused by the COVID-19 pandemic?Hon GRANT ROBERTSON: The IMF overnight forecast Government debt in advanced economies to rise above an average of 130 percent of GDP due to the fiscal stimulus and spending required to deal with the virus. The IMF measures debt on a gross level. In New Zealand our gross debt is forecast to be less than 60 percent of GDP in 2024—so less than half of the average of advanced economies. This shows that New Zealand is well positioned to be able to invest to cushion the blow of COVID-19 on businesses and households while delivering our plan to recover and rebuild the economy. New Zealand also has one of the most open economies in the world due to the success of our lockdown and the sacrifices made by all New Zealanders. So as the IMF warns of the continued impacts of social distancing and lockdowns in other parts of the world it pays to reflect on the privileged position we have here in New Zealand due to our collective success in fighting this global pandemic.