New Zealand’s high proportion of winter sunshine hours and
considerable rainfall provide an ideal resource base for pastoral
agriculture, forestry, horticulture and hydro-electicity generation.
Hydro-electricity provides a relatively cheap source of energy
and has allowed the development of energy-based industries
such as aluminium refinement. New Zealand is also a popular
overseas visitor destination and tourism is an important source of
Over the last quarter of a century, the New Zealand economy has
changed from being one of the most regulated in the OECD to one
of the least regulated. The minority National Party Government
elected in November 2008, and re-elected in November 2011,
aims to lift the long-term performance of the economy through
six key policy drivers: a growth-enhancing tax system; better
public services; support for science, innovation and trade;
better regulation, including regulation around natural resources;
investment in infrastructure; and improved education and skills.
Real GDP strengthened further at the beginning of 2012, growing
0.9% in the March quarter. The growth in activity was reasonably
broad-based, including good pastoral growing conditions
providing a boost to agricultural production and food processing.
However, growth in the middle of 2012 was weaker with GDP
growth of 0.5% across both the June and September quarters,
supported by activity in the construction sector. The Canterbury
rebuild is expected to be a main driver of growth in the coming
year, gaining momentum in the first half of 2013.
In the December 2012 Half year Economic and Fiscal update
(HyEFu), the New Zealand Treasury expected annual average
growth in the economy to be 2.3% in the March 2013 year and
2.9% in the March 2014 year, driven mainly by the Canterbury
rebuild and recovery in domestic demand. Recovering world
demand, as well as still-high commodity prices, should also assist
export growth, although this is dependent on the global outlook.
Geographic distribution of external Trade
New Zealand’s trading relationships are becoming increasingly
based around Pacific Rim countries. New Zealand’s three largest
export markets – Australia, China and the united States –
accounted for 44.4% of New Zealand’s merchandise exports and
41.2% of merchandise imports in the year ended 30 September
2012. Japan remains an important trading partner, both as a
destination for exports and a source of imports. However, Asia
excluding Japan is growing rapidly in importance, with the region
increasing its share of merchandise exports to around 30%, up
significantly from a decade ago.