Category: Domestic Economy

MIL-Evening Report: Keith Rankin Analysis – How did New Zealand compare in the first half of the 2020s?

Analysis by Keith Rankin.

Keith Rankin, trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

The following two tables show New Zealand and the 24 other economies in the world most easily and fruitfully compared to New Zealand. The countries are sorted with the worst-performing economies (in terms of economic growth per capita) listed at the top. Thus, taking four-year compounded growth for 2020, 2021, 2022 and 2023, Germany was the worst performer (ranked 25 out of 25); its economy, adjusted for population growth, shrank over four years by 1.2 percent.

The ‘top’ three countries in the table all had such negative growth.

Table 1: Rankings for 25 Advanced Economies 2019-23

2019-23*	growth pc	inflation	interest	population
	rank	rank	rank	rank
Germany	25	6	9	18
Finland	24	19	9	20
Austria	23	1	9	9
United Kingdom	22	2	4	12
Canada	21	14	3	3
Spain	20	15	9	10
France	19	16	9	19
Japan	18	24	25	24
Norway	17	10	7	6
Sweden	16	9	21	15
New Zealand	15	4	1	5
Switzerland	14	25	24	7
Australia	13	11	8	4
Belgium	12	8	9	13
Portugal	11	17	9	16
Netherlands	10	3	9	8
Italy	9	12	9	23
Israel	8	22	6	1
United States	7	5	2	11
Slovenia	6	7	9	17
Denmark	5	18	23	14
Korea	4	21	5	21
Greece	3	20	9	25
Taiwan	2	23	22	22
Ireland	1	13	9	2
*	end of year data for inflation and interest

source: IMF World Economic Outlook Database, April 2025

On growth, New Zealand was in the middle of the pack, with 3.9 percent compounded growth per capita; that averages out to just below one percent per annum.

On inflation and interest rates, a high ranking is generally regarded as a poor performance; although a low inflation rate may be outside the policy target zone, just as a high inflation rate may be. New Zealand had the fourth-highest CPI inflation over that four-year period, comparing consumer prices in December 2023 with December 2019. In December 2023, consumer prices were 20.6% higher than in December 2019. The country with highest compounded inflation was Austria with 22.4%, and the lowest Switzerland with 5.5%.

New Zealand had the highest compounded interest rates for that period; it had top-ranking for high-interest. If $1,000 was ‘invested’ at the Official Cash Rate each December from December 2020, and reinvested each December for four years in total, the accumulated amount would have been $1,111. Next highest were the United States and Canada. This ranking gives a sense of the monetary policy in the four years after the 2020 covid wave; New Zealand had the tightest monetary policy for the period as a whole, meaning the strongest ‘anti-inflationary policy’. If you see Table 2 below, you will see that New Zealand had the lowest economic growth in 2024, a direct consequence of that tighter monetary policy stance.

On interest rates, we note that the countries in the Euro currency zone all experience the same monetary policy setting. It means that those Euro countries which are more aggressively anti-inflation tend to resort most to fiscal consolidation, a euphemism for government retrenchment and austerity. There is no simple measure for tight fiscal policy; the Budget deficit/surplus is often used incorrectly because government retrenchment significantly undermines government revenue.

On inflation, we note that some of those northern European countries which we normally expect to have low inflation actually had the highest inflation: Austria, Netherlands, Germany. One country similar to New Zealand on inflation and interest, and with zero growth per capita, was the United Kingdom. Australia was better than New Zealand on all three measures: growth, inflation, and interest. And much the same as New Zealand on population growth.

Table 2: Rankings for 25 Advanced Economies 2023-24

2023-24*	growth pc	inflation	interest	population
	rank	rank	rank	rank
New Zealand	25	13	6	2
Austria	24	15	8	15
Canada	23	17	7	1
Finland	22	22	8	12
Ireland	21	24	8	3
Germany	20	9	8	20
Israel	19	3	2	5
Switzerland	18	25	24	4
United Kingdom	17	10	1	6
Netherlands	16	2	8	11
Belgium	15	1	8	14
Australia	14	11	5	13
Japan	13	6	25	25
Sweden	12	20	22	17
Italy	11	23	8	22
France	10	21	8	19
Portugal	9	4	8	10
Norway	8	14	2	7
Slovenia	7	19	8	18
United States	6	8	2	9
Korea	5	16	20	21
Spain	4	7	8	8
Greece	3	5	8	24
Denmark	2	18	21	16
Taiwan	1	12	23	23
*	end of year data for inflation and interest

source: IMF World Economic Outlook Database, April 2025

Table 2 shows the same data items for 2024. Of particular interest is the 2024 growth and inflation rates in 2024, compared to the interest rates for the preceding four years. New Zealand, with the toughest monetary policy over a longer period certainly got the recession it asked for; and was the median country for CPI inflation in 2024, virtually bang-on the policy target. (Was the pain worth it?)

It’s important to note that many countries with significantly lower inflation than New Zealand did not have anything like the very high policy interest rates that New Zealand was subjected to; eg Sweden, Italy, France, Denmark, Slovenia. Any beneficial link from high interest rates to low inflation remains moot; and it is clear that high-interest-rate policies do much damage to the wider economy. While Japan had higher inflation in 2024 than New Zealand, we note that Japan’s overall increase in consumer prices in the half-decade was much lower than New Zealand’s. Japan’s inflationary pressures are almost entirely imported, with New Zealand’s domestically generated CPI inflation being significantly greater than Japan’s.

We should note that southern Europe was doing particularly well in 2024. Although Greece’s per capita growth is fuelled in part by substantial population losses. Spain, on the other hand, is getting its population back. Further north, the Austrian economy is looking particularly problematic; it’s no wonder the ‘far-right’ political party did so well there in elections at the end of 2024 (ten percentage points higher than the Hitler-led NSDAP party got in Germany in 1930). And Finland is not looking happy either, despite low inflation.

United States, United Kingdom and Australia continued to have above-median inflation in 2024, despite – or, more likely, because of – their continued perseverance with high-interest monetary policies.

On population growth we see that Canada has been the overall ‘winner’, presumably in the sense that it both attracts and accepts immigrants. Surprisingly, in 2024 Australia slumped in its population growth, whereas New Zealand did not. I suspect that 2025 will show more immigration in Australia than New Zealand.

Finally

All is not well in the New Zealand economy. And it’s also quite unwell in some other countries, especially the North European Euro-zone countries, and the United Kingdom. And the United States, with its tight monetary policies, seems to have only averted the fate of the United Kingdom and New Zealand (and Germany and Austria) by virtue of stimulus to its military-industrial complex. Or, strictly speaking, to its military complex. Civilian industry remains weak in the USA.

*******

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

MIL OSI Analysis – EveningReport.nz –

July 30, 2025

MIL-Evening Report: Keith Rankin Analysis – Public Debt, Japan, and Wilful Blindness
Analysis by Keith Rankin.

Keith Rankin, trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

I just heard on Radio New Zealand a claim by a British commentator, Hugo Gye (Political Editor of The i Paper), that the United Kingdom (among other countries) has a major public debt crisis, and that if nothing is done about it (such as what Rachel Reeves – Chancellor of the Exchequer – is wanting to do), then in 2070 the public debt to GDP ratio would reach an ‘extreme’ level of 270% of GDP (gross domestic product). He added for good measure that no country in the world has public debt at a level anything like that. (Refer UK: Macron meets the King, RNZ, 10 July 2025.)

So I checked the International Monetary Fund, World Economic Outlook Database, April 2025, and found the following about Japan, the world’s fourth-largest national economy, looking at years from 2010 to 2024, with respect to government gross debt and general government financial deficit:
- minimum debt 206% (in 2010)
- maximum debt 258% (in 2020)
- average debt 234%
- current debt 237% (in 2024)
- projected debt 232% (in 2030)
- minimum deficit 2.3% (in 2023)
- maximum deficit 9.1% (in 2010)
- average deficit 5.3%
- current deficit 2.5% (in 2024)
- projected deficit 5.3% (in 2030)
Japan does not have a ‘cost of living crisis’. Below is a list of Japan’s interest (source: tradingeconomics.com) and inflation rates (again the reference period is 2010 to 2024):
- minimum interest -0.1% (in 2016-2024)
- maximum interest 0.25% (in 2024)
- average interest 0.0%
- current interest 0.5% (in 2025)
- minimum inflation -0.7% (in 2010)
- maximum inflation 3.3% (in 2023)
- average inflation 0.9%
- current inflation 2.4% (in 2025)
- projected inflation 2.0% (in 2030)
Japan is a prosperous country, with high life expectancy (85, the highest in the world for large economy nations), a very high ratio of retired people to working-age people, low inflation, and low interest rates. It was able to host the Olympic Games in 2021 without any financial fuss, and is about to host World Expo 2025. It has some of the world’s most sophisticated infrastructure.

Despite its high government debt – actually, to a large extent because of its high government debt – Japan’s is a creditor economy. Japan is not in debt to the rest of the world. Japan’s national debt is non-existent. Japan’s government debt is widely acknowledged, however, to be the world’s highest. Too many commentators – using wilful laziness – conflate national debt with government debt.

Japan’s is the world’s most successful twenty-first century large economy. It operates by Japanese savers lending much of their savings to their government at very low interest rates; those savers prefer to lend to their government rather than to pay high taxes to their government. Prosperous Japanese people are not greedy in the way that many rich westerners are. Their mantra is ‘private wealth, public wealth’; not ‘private wealth, public poverty’. Japan’s is not a zero-sum economy; in a zero-sum economy the prosperity of some comes at the expense of the impoverishment of others.

Hugo Jye was negligently dishonest – a case of wilful blindness or ignorance – in claiming that no countries had anything like 270% of GDP government debt. Western economists and financial commentators are likewise wilfully negligent in failing to alert their countries’ governments that there is an alternative – in plain sight – to our woeful policies of financial suffocation.

Note about three other economies

Within the European Union, it is rare for professional commentators to sing the praises of Spain and Italy. Spain, with 101% public debt, is enjoying a low inflation economic boom. It has a life expectancy of 83, higher than all European Union countries other than Malta and Luxembourg. Spain has had only government budget deficits since the surpluses of the years leading up to the 2008 Global Financial Crisis (a crisis which hit Spain particularly badly). Despite – no, because of – these accumulated deficits, Spain’s public debt (as a percent of GDP) has been falling since 2020; the deficits stimulated GDP. Spain had one year of high inflation (8.3% in 2022; the next highest since 2020 were 3.05% in 2011 and 3.0% in 2021); it recovered very quickly from that one year. Spain’s current interest rate is 2.15%.

Italy had 135% government debt to GDP in 2024. Its people’s life expectancy is high, marginally lower than Spain’s and slightly higher than New Zealand’s; significantly higher than Germany, Netherlands and the United States. Italy’s economy has been growing faster than the European Union average. Its public debt (compared to GDP) has been falling despite government deficits.

Spain and Italy are doing relatively well despite having among the highest older-person to younger-person age ratios in Europe. Spain is pro-actively utilising immigrant labour, whereas Northern Europe is scapegoating immigrants. And Spain, unlike most of Europe, is not looking to its ‘Defence’ budget to boost future growth.

Türkiye’s public debt has fallen from a high (since 2006) of 40% in 2021 to under 30% in 2023. This is despite double-digit inflation since 2016 and an average budget deficit since 2011 of 5.3%. While high inflation has benefitted Türkiye by bringing about negative real interest rates (meaning interest payments effectively flow from richer to poorer, generally benefitting indebted Turkish businesses and households), current interest rate settings look like suffocating for Türkiye for the remainder of the 2020s. (This monetary policy of suffocation is also true for Australia in 2025, with its particularly hawkish Reserve Bank at present.)

Despite challenging geopolitical and climatic circumstances, Türkiye has, at least until 2024, managed to achieve rising living standards for a substantial majority of its people. Unlike the United Kingdom and some northern European countries, Türkiye has not been a crisis economy despite (or because of) a reputation for unsound public finance.

*******

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.
MIL OSI Analysis – EveningReport.nz –
July 10, 2025

Category: Domestic Economy

MIL-Evening Report: Keith Rankin Analysis – How did New Zealand compare in the first half of the 2020s?

MIL-Evening Report: Keith Rankin Analysis – Public Debt, Japan, and Wilful Blindness