New Zealand Economy, GDP, Budget, Industry and Agriculture


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New Zealand Economy

View the information below regarding the economy of New Zealand. The summary and statistics contains gdp, industry, agriculture and more for New Zealand. If you need other information please visit the New Zealand Country Page.

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    GDP (2002): U.S.$50.2 billion.
    Real annual GDP growth rate (2002): 3.2%.
    Per capita income (2002): U.S.$12,804.
    Natural resources: Timber, natural gas, iron sand, coal.
    Agriculture (9.7% of GDP): Products--meat, dairy products, forestry products.
    Industry (46.1% of GDP): Types--food processing, textiles, machinery, transport equipment.
    Trade (2001-02): Exports--U.S.$13.9 billion: meat, dairy products, forest/wood/paper products, metals, fruit, machinery and equipment. Major markets--Australia, U.S., Japan, U.K. Imports--U.S.$13.7 billion: machinery and equipment, vehicles, plastics, mineral fuels, petroleum, medical equipment. Major suppliers--Australia, U.S., Japan, China.

    Economy of New Zealand
    New Zealand's economy has been based on a foundation of exports from its very efficient agricultural system. Leading agricultural exports include meat, dairy products, forest products, fruit and vegetables, fish, and wool. New Zealand was a direct beneficiary of many of the reforms achieved under the Uruguay Round of trade negotiations, with agriculture in general and the dairy sector in particular enjoying many new trade opportunities. The country has substantial hydroelectric power and reserves of natural gas. Leading manufacturing sectors are food processing, metal fabrication, and wood and paper products.

    Since 1984, government subsidies including for agriculture were eliminated; import regulations liberalized; tariffs unilaterally slashed; exchange rates freely floated; controls on interest rates, wages, and prices removed; and marginal rates of taxation reduced. Tight monetary policy and major efforts to reduce the government budget deficit brought the inflation rate down from an annual rate of more than 18% in 1987. The restructuring and sale of government-owned enterprises in the 1990s reduced government's role in the economy and permitted the retirement of some public debt. As a result, New Zealand is now one of the most open economies in the world.

    Economic growth has remained relatively robust in recent years (i.e., around 3%), benefiting from a boost in exports provided by a weak Kiwi dollar, good weather, and favorable international commodity prices. In 2002, consumer spending and housing investment have played a larger role in underpinning this expansion. New Zealand did not experience the slowdown in growth seen in many other countries following the events of September 11, 2001 and the subsequent fall in overseas share markets. The prolonged period of good economic growth led the unemployment rate to drop from 7.8% in 1999 to 5.4% in late 2002. The growth also has helped to substantially narrow the current account deficit, which stood at 8% of GDP in 2000. Forecasters now expect this ratio to be in the 4%-5% range over the next few years.

    New Zealand's economy has been helped by strong economic relations with Australia. Australia and New Zealand are partners in "Closer Economic Relations" (CER), which allows for free trade in goods and most services. Since 1990, CER has created a single market of more than 22 million people, and this has provided new opportunities for New Zealand exporters. Australia is now the destination of 20% of New Zealand's exports, compared to 14% in 1983. Both sides also have agreed to consider extending CER to product standardization and taxation policy. New Zealand initialed a free trade agreement with Singapore in September 2000 and is seeking other bilateral/regional trade agreements in the Pacific area.

    U.S. goods and services have been competitive in New Zealand, though the strong U.S. dollar has created challenges for U.S. exporters in 2000-01. The market-led economy offers many opportunities for U.S. exporters and investors. Investment opportunities exist in chemicals, food preparation, finance, tourism, and forest products, as well as in franchising. The best sales and investment prospects are for information technology, tourism, food processing and packaging, biotechnology, and medical equipment. On the agricultural side, the best prospects are for fresh fruit, snack foods, specialized grocery items such as organic foods, and soybean meal.

    New Zealand welcomes and encourages foreign investment without discrimination. The Overseas Investment Commission (OIC) must give consent to foreign investments that would control 25% of more of businesses or property worth more than NZ$50 million. Restrictions and approval requirements also apply to certain investments in land and in the commercial fishing industry. OIC consent is based on a national interest determination, but no performance requirements are attached to foreign direct investment after consent is given. Full remittance of profits and capital is permitted through normal banking channels.

    A number of U.S. companies have subsidiary branches in New Zealand. Many operate through local agents, and some are in association in joint ventures. The American Chamber of Commerce is active in New Zealand, with its main office in Auckland and a branch committee in Wellington.


  • New Zealand Government
  • New Zealand People
  • New Zealand Geography
  • New Zealand History