Reserve Bank Governor, Alan Bollard has said that New Zealand should make efforts to balance its economy and in particular, the external debt, which is being faced. He, in his speech to Wellington Chamber of Commerce said that more efforts from the households and banks are required in order to reduce the market risks.

According to him, the Government accounts have a better track of finances and the liquidity policy of Reserve Bank has also boosted the bank funding. However, the low savings and high debt ratios of households are a threat to the economy.

"We believe New Zealanders have decided they are over-exposed to property assets and to high debt, and they are prepared to constrain consumption to improve their savings", Bollard said.

Bollard has said that huge deficit in the investment income is becoming a restraint in the improvement of the economy, despite an increase in export prices and a decrease in imports. He has said that the continuous external debt will not exempt the country from punishments, and external investors can ask for bigger premiums for funding.

He said foreigners have invested more in New Zealand as compared to the Kiwis' investment, abroad. This in turn, leads to more servicing debt and returning profits to those foreign investors.

He, in his statement mentioned that fiscal and tax policy must be redesigned, so that the vulnerability in the market can be reduced.