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New-Zealand: Economic and Political Outline
Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline
New Zealand's GDP dropped due to the global economy slowdown. The country had shown a negative growth during 18 months before its GDP became stable and restarted its growth again in 2010. This improvement was notably due to the establishment of an efficient monetary policy (a reduction of the key rate from 8.25% to 2.5%), an attractive fiscal policy, a strong increase of the migratory balance which stimulated the domestic demand, a small revival in the sectors of real estate and services for companies, as well as a stimulus plan aiming in particular at employment, education, tourism, telecommunications, building and infrastructures.
This activity was highly influenced by the dynamism of the primary sector, in particular by the fishing, forestry and mining industries. Traditionally, New Zealand's economic growth factors are domestic demand and exports. Its GDP per capita is in the process of catching up with the main western European economies ( USD 38,227 in 2011). However, unemployment started to increase again due to the economic crisis (6.4% in 2011).
The country was struck by two strong earthquakes in December 2010 and in February 2011and the cost of the reconstruction was estimated to be more than NZD 2 billion. At the beginning of 2011, the country experienced a strong appreciation of its currency, which had, as a consequence, a high increase in the cost of living. The inflation rate has also increased reaching an annual average of 5.3% in 2011. Nevertheless, the positive economic benefits from the Rugby World's Cup, the greatest sporting event that New Zealand has ever hosted, which took place in September and October 2011, should allow the country to reach a growth rate of more than 3% in 2012.
| Main Indicators | 2009 | 2010 | 2011 | 2012 (e) | 2013 (e) |
| GDP (billions USD) | 117.94e | 140.51 | 168.82 | 182.70 | 191.44 |
| GDP (Constant Prices, Annual % Change) | -2.0 | 1.7e | 2.0 | 3.8 | 3.2 |
| GDP per Capita (USD) | 27,293 | 32,163 | 38,227e | 40,936 | 42,457 |
| General Government Balance (in % of GDP) | -2.1 | -4.5 | -5.1e | -3.0 | -1.1 |
| General Government Gross Debt (in % of GDP) | 26.1 | 32.0 | 35.3e | 34.6 | 34.1 |
| Inflation Rate (%) | 2.1 | 2.3 | 4.4 | 2.7 | 2.4 |
| Unemployment Rate (% of the Labor Force) | 6.2 | 6.5 | 6.4 | 5.6 | 4.8 |
| Current Account (billions USD) | -3.38e | -5.74e | -6.51 | -10.15 | -11.56 |
| Current Account (in % of GDP) | -2.9 | -4.1 | -3.9e | -6.0 | - |
Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data
Note: (e) Estimated Data
New Zealand is one of the smallest economies of the OECD and it is still heavily dependent on agricultural products. Agriculture represents New Zealand's main source of exports. The country produces 2% of the total global production of dairy products. The other main agricultural export products are meats, wood, fruits and fishing products. New Zealand also has a thriving wine industry. The country is rich in many natural resources, in particular, gas, oil and coal.
The industrial sector represents one-fourth of the GDP and employs nearly 20% of the workforce. Food processing, textiles and transportation equipment are among the main industries of the country.
The services sector accounts for more than two-thirds of the GDP and workforce. Tourism, which has been growing rapidly in recent years, is one of the country's most important sources of foreign-exchange revenues. The sectors of retail and wholesale trade, restaurants and hotels are major components of the economy of New Zealand, accounting for almost 25% of the services sector. The quality of the transport infrastructures plays an essential role in the country's economic growth.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 6.6 | 20.9 | 72.5 |
| Value Added (in % of GDP) | 5.6 | 25.0 | 69.4 |
| Value Added (Annual % Change) | -2.8 | -5.2 | 0.4 |
Source: World Bank - Last Available Data.
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| Monetary Indicators | 2006 | 2007 | 2008 | 2009 | 2010 |
| New Zealand Dollar (NZD) - Average Annual Exchange Rate For 1 USD | 1.54 | 1.36 | 1.42 | 1.60 | 1.39 |
Source: World Bank - Last Available Data.
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Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation
Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
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Foreign trade is an essential element in New Zealand's economy, which is currently, one of the most open economies in the world. The share of foreign trade in its GDP represents more than 50%. The country's economy is very trade-oriented, with exports of goods and services accounting for 33% of the total output.
The main trade partners of New Zealand (both for imports and exports) are Australia (most of the merchandise circulates freely between the two countries), China, the United States and Japan. The main exports of the country are dairy products, meats, wool, machinery, fruits and peanuts. The main commodities imported are vehicles, machinery, mineral fuels and oil, electric and electronic equipment and plastics. The trade balance attained a surplus in 2009 due to the increase in milk exports and the drop in prices and volume of imports.
In 2010, New Zealand signed a free trade agreement with Malaysia and negotiations have begun in February 2011 to set up a free trade agreement between New Zealand, Russia, Belarus and Kazakhstan.
| Foreign Trade Indicators | 2007 | 2008 | 2009 | 2010 | 2011 |
| Imports of Goods (million USD) | 30,882 | 34,369 | 25,566 | 30,628 | 37,075 |
| Exports of Goods (million USD) | 26,943 | 30,580 | 24,933 | 31,372 | 37,675 |
| Imports of Services (million USD) | 9,089 | 9,585 | 7,825 | 9,227 | 11,233 |
| Exports of Services (million USD) | 9,285 | 9,132 | 7,760 | 8,908 | 10,047 |
| Imports of Goods and Services (Annual % Change) | 10.0 | -4.7 | -14.8 | - | - |
| Imports of Goods and Services (in % of GDP) | 29.2 | 32.0 | 26.5 | - | - |
| Exports of Goods and Services (in % of GDP) | 28.3 | 30.7 | 28.2 | - | - |
| Trade Balance (million USD) | -1,790 | -1,705 | 1,316 | 2,367 | - |
| Trade Balance (Including Service) (million USD) | -1,608 | -2,162 | - | - | - |
| Foreign Trade (in % of GDP) | 57.4 | 62.7 | 54.7 | - | - |
Source: WTO - World Trade Organization ; World Bank , Last Available Data
| Main Customers (% of Exports) |
2010 |
| Australia | 23.0% |
| China | 11.1% |
| United States | 8.6% |
| Japan | 7.8% |
| United Kingdom | 3.5% |
| See More Countries | 46.0% |
| Main Suppliers (% of Imports) |
2010 |
| Australia | 18.2% |
| China | 16.0% |
| United States | 10.4% |
| Japan | 7.3% |
| Germany | 4.1% |
| See More Countries | 44.0% |
Source: Comtrade, Last Available Data
Source: Comtrade, Last Available Data
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Source: Worldwide Press Freedom Index 2011, Reporters Without Borders
Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
Map of freedom 2010
Source: Freedom House
Note: The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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Last Updates: May 2012