By Stephen Wright
WELLINGTON, New Zealand–Criticism of the New Zealand central bank’s stimulus response to the Covid-19 pandemic is “hindsight economics,” Finance Minister Grant Robertson said Tuesday, continuing to back the RBNZ’s leadership.
Most countries are grappling with decades-high inflation after record-low interest rates and increased government spending during the pandemic caused a surge in demand. Global shipping disruptions and Russia’s invasion of Ukraine also have contributed to rapid price increases.
Mr. Robertson said he continues to have confidence in the RBNZ and its governor, Adrian Orr.
“I think there is a tremendous amount of hindsight economics taking place at the moment where people are trying to rewrite history,” he told reporters.
“The criticism of central banks around the world does somewhat betray the fact that everyone had to deal with a very difficult situation,” Mr. Robertson said. “The RBNZ does have my confidence and has my confidence in the way they dealt with the situation.”
New Zealand’s opposition National Party leader Christopher Luxon has called for an independent inquiry into the “tidal wave” of cash unleashed by fiscal and monetary measures.
The New Zealand Initiative think tank on Tuesday released a report that said central banks had made mistakes that led to inflation far exceeding their policy targets.
Former RBNZ Governor Graeme Wheeler was an author of the report, which said central banks were overconfident, too slow to withdraw stimulus and in some cases less effective because they had strayed from a singular focus on targeting inflation.
Mr. Robertson didn’t rule out or endorse the idea of an inquiry into the RBNZ’s response to the pandemic.
“There will always be lessons to learn,” he said.
Write to Stephen Wright at stephen.wright@wsj.com
(END) Dow Jones Newswires
July 25, 2022 19:52 ET (23:52 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
