RBNZ’s Conway Sees Economic Slack Shaping Response to Oil Shock

New Zealand’s central bank sees lingering slack in the economy that will shape how aggressively it responds to the inflationary aftershocks of higher oil prices, Chief Economist Paul Conway said.

“We think there is still excess capacity in the economy, so the output gap is still negative. You see that across a bunch of indicators, including unemployment at 5.3%,” Conway said in an interview in Auckland Wednesday.