New Zealand is usually in the news for the sporting prowess of its rugby players and cricketers and for its tectonic susceptibility as an island on the Pacific Rim of Fire. Indeed, the city of Christchurch is still dealing with demolition of buildings made unsafe by the 2011 quake and attempting to repair thousands of other buildings which were damaged.
Once, agriculture dominated the NZ economy, but that situation has changed over the past 20 years and now some 70% of GDP comes from the service sector (notably financial and tourism) with industrial output chipping in 25% and agriculture reduced to just 5%. Unemployment sits at 6.4% and the central bank interest rate at 2.75% and inflation of about 1.3%. The central bank expects interest rates to increase to 4.5% over the next two years as it attempts to keep inflationary pressures in the economy under control.
According to the nation’s statistical agency, imaginatively called “Statistics New Zealand”, the economy grew by 0.9% in Q4; one of the strongest performances seen in any democratic economy. That result returned an annual GDP of 2.7%, making the country one of the strongest growing mature economies in the world. By comparison, the Q4 growth in the US, UK, Canada, Australia and Japan came in at 0.6; 0.7; 0.8; 0.8 and 0.2% respectively. The figures marked three straight years of economic growth. Manufacturing output increased by 2.1% which was its best performance for seven years.
The ruling party faces an election in the autumn. Finance Minister, Bill English hailed the results, noting that: "Business and consumer confidence remains high, manufacturing activity has been expanding for almost a year and a half and the current account deficit is less than half of what it was five or six years ago”, factors he attributed to his government’s successful fiscal management of the country.