The New Zealand Economy
Imports and Exports
For a developed country, the New Zealand economy is still largely dependent on the income generated by it’s farming industry, although the the traditional meat, dairy and wool has been expanded to include fruit, wine, timber and others. Foreign trade is a vital element of New Zealand’s economy, which is one of the most open in the world. The New Zealand economy is very trade-oriented, with the exports of goods and services accounting for 33% of the total economic output.
The tourism industry is considered the biggest contributor to New Zealand’s economy, and the country has successfully attracted several major filming contracts, the best known of these is the Lord of the Rings trilogy, directed by New Zealand’s own, Peter Jackson. Estimates have set the increase of visitors to New Zealand as rising by 4percent annually, until 2013.
The Kiwi economy has also been helped by strong economic relations with Australia. New Zealand’s economy has traditionally been based on a foundation of exports from its world class agricultural system. The country also has huge water based} power reserves and huge reserves of natural gases.
The country imports mainly petroleum, textiles, textiles, aircraft, and plastics. Its main trading partners are: Australia, European Union, the USA, Japan and China.
Important manufacturing industries are food processing and preparation, metal fabrication and wood and paper products. Major agricultural exports are dairy, meat, timber, fruit and vegetables, fish, and wool. Moody’s forecasts that the Kiwi economy will grow by 2.4percentage points in 2010, and “assuming a healthy global economy. the country’s recovery should evolve into a self-perpetuating expansion during 2011 and 2012.
Reserve Bank of New Zealand
Established in 1934, the Reserve Bank of New Zealand is the country’s central bank , tasked with setting and controlling a monetary policy designed to keep the country’s economy sustainable. It is solely owned by the government and is the only authority with the mandate to print New Zealand currency. It also supervises registered banks in the country, sets interest rates , and conducts open market operations in order to respond to {developing economic changes.
Real Estate Market
With an expanding population growth and a slow housing supply, the real estate market is sure to expand in New Zealand. This long-term outlook, however, will depend on the ability of New Zealand’s economy to recover and achieve healthy GDP expansion.
New Zealand Dollar
The New Zealand Dollar , abbreviated NZD or NZ$, and also informally referred to as the Kiwi dollar, is the official currency of the country. The same currency is also used in the Pitcairn Islands, Tokelau, Niue, and the Cook Islands. The New Zealand Dollar was introduced in 1967 to replace the New Zealand pound, when the country decimalised its currency. The New Zealand dollar is comparatively weak relative to major currencies such as British Sterling, the Euro, the Yen, or the US dollar. This makes the country a very attractive choice for many tourists. The New Zealand dollar often closely tracks the Australian dollar due to their close geographical location. Both typically have higher central bank interest rates compared to other European countries, which results in the currency being a popular in carry-trades. The value of the Kiwi dollar has been floating, i.e., determined by the financial markets, since March 4, 1985. Since then its value has been fluctuating between 0.40c – 0.72c United States dollars to the Kiwi dollar.
Gross Domestic Product
New Zealand Gross Domestic Product Per Capita stands at around 14995 US dollars, according to the World Bank. The GDP per capita is obtained by dividing the country’s gross domestic product, adjusted by inflation, by the total population. The country’s Gross Domestic Product grew by 0.2% in the June quarter 2010, considerably below predictions due to the global economic slowdown.
The Future
Being a tiny island country closely flanked by a huge economic powerhouse, the country will always be dependent to a degree on the state of the Australian economy, especially if one considers the large volume of trade that is conducted between the two countries. Two other factors that could have a major impact on the country’s economy is a natural disaster and disease as the economy is still largely based on it’s agriculture industry.
This is however slowly changing as the country expands it’s IT and Film Industries. This is great news for immigrants from these industries as it is opening up a lot more job opportunities in a wider range of occupations.
