New Zealand’s economy

  • the 53rd-largest national economy in the world when measured by nominal gross domestic product (GDP)
  • 68th-largest in the world when measured by purchasing power parity (PPP).
  • one of the most globalised economies
  • depends on international trade – mainly with Australia, the European Union, the United States, China, South Korea, Japan and Canada.
  • diverse with a sizable service sector, accounting for 63% of all GDP activity as of 2013.[15]
  • has large-scale manufacturing industries include aluminium production, food processing, metal fabrication, wood and paper products. Mining, manufacturing, electricity, gas, water, and waste services accounted for 16.5% of GDP as of 2013.[15]
  • the primary sector continues to dominate New Zealand’s exports, despite accounting for only 6.5% of GDP as of 2013.[15

OECD’s economic outlook 

New Zealand’s level of debt is below the OECD average.  The OECD website enables comparisons on a number of dimensions across a range of OECD countries.  The website enables NZ to be compared with a range of other OECS countries.

Government Debt

Generally, Government debt as a percent of GDP is used by investors to measure a country ability to make future payments on its debt, thus affecting the country borrowing costs and government bond yields (NZ Treasury).

New Zealand recorded a government debt equivalent to 19.90 percent of the country’s Gross Domestic Product in 2018. Government Debt to GDP in New Zealand averaged 23.70 percent from 1972 until 2018, reaching an all time high of 54.80 percent in 1992 and a record low of 4.40 percent in 1974.

Government Debt as a percentage of GDP

Economic Resilience

  1. Real net stock of total assets per person (data available for 2013)
  2. Real net stock of infrastructure per person
  3. Real investment in fix captial per person
  4. Ratio of debt services to export earnings
  5. Diversity of exports
  6. Government debt

The 2008 report is the most recent with exception of #1.  This is problematic as the Global Financial Crisis 2008 had a significant impact on NZ economy and level of debt

The NZ economic chart pack has many economic indices – unfortunately the measures don’t align with  the economic resilience indicators used by the Statistic New Zealand’s Progress indicator.

Productivity and innovation

Generally speaking, the higher the productivity of a country, the higher the living standards that it can afford and the more options it has to choose from to improve well-being. High productivity societies are characterised by:

  • smart choices about savings and investment versus current consumption;
  • dynamic and competitive markets;
  • openness to trade and to international connectedness;
  • high awareness of external influences;
  • rapid uptake and smart application of new technologies, products and processes; and
  • increasing demand for highly skilled and creative people.

These are the successful societies that attract and retain people, ideas and capital“.

Reform Agenda – Conway (2016, 2018)

  • flexibility, openness and receptiveness to new technology.
  • prioritising trade in services and digital products in New Zealand’s trade strategy;
  • improving the matching of skills to jobs, including encouraging the education system to be more adaptive and responsive to labour market demands;
  • focusing immigration policy on lifting the skill composition of the workforce;
  • making investment easier and more effective, including different forms of taxation and saving (e.g.,business assets and housing);
  • enhancing New Zealand’s policymaking capability (including the use of monitoring and evaluation) and the delivery of services

Assets and Infrastructure

Definition – Assets and infrastructure 

  • Net (wealth) capital stock refers to the current market valuation of an industry’s or an economy’s productive stock (OECD).
  • This includes fixed assets, such as machinery, equipment, buildings, and infrastructure that can be used in production for more than one year.
  • The real net stock of total assets represents accumulated investment, less retirements and accumulated depreciation for assets still operating (that is, gross capital stock less accumulated depreciation on assets still in operation). Ensuring that a broad base of assets is maintained can increase opportunities for future economic development.
  • This indicator is expressed in 1995/96 dollars, to remove the effect of price changes. (NZ Statistics)