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New-Zealand - Overview

Contents extracted from the comprehensive atlas of international trade by Export Entreprises

Introduction

Capital:: Wellington
Area:: 268 km2
Total Population:: 4.433
Annual growth rate:: 1.00%
Density:: 17.00/km2
Urban population:: 86%
Population of Auckland (1.333), Wellington (400), Christchurch (360), Hamilton (185), Napier (120)
Official language: English and Maori.
Business language: English
Ethnic Origins:: New Zealand European 69.8%, Maori 7.9%, Pacific Islander 4.5%, Asian and others 17.8%
Beliefs: Anglican 24%, Presbyterian 18%, Roman Catholic 15%, Methodist 5%, Baptist 2%, other Protestant 3% and unspecified or none 33%
Telephone codes:
To make a call from: 0
To make a call to: +64
Internet suffix:: .co.nz
Type of State::
Parliamentary democracy and Constitutional monarchy within the Commonwealth. Executive power is vested in the governor-general, who represents the British Crown. The legislature is a unicameral parliament with 121 representatives.
Type of economy::
High-income economy, OECD, WTO and APEC member. South Pacific Forum member.
New Zealand is very dependent on foreign trade. Strongly focused on agriculture and tourism. Amongst the world leader for production and export of milk & dairy products

Economic overview

New Zealand's GDP dropped due to the global economy slowdown between 2007 and 2010. The country had shown a negative growth during 18 months before its GDP became stable and restarted its growth again in 2010 and 2011 with 0,9% and 0,5% respectively. 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. 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, has allowed the country to reach a growth rate of 3.2% in 2012. This trend was confirmed in 2013 with 2.4% and the forcast for 2014 is 3%

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 (over USD 31 000 USD in 2013). However, unemployment started to increase again due to the economic crisis (6.2% in 2013 against 6.8% in 2012).

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. But the reconstruction effort was instrumental in the country's growth. The inflation rate remained low in 2013 with 1.3% and the trade balance remained positive.

Main industries

New Zealand is one of the smallest economies of the OECD and it is still heavily dependent on agricultural products. Agriculture (5% of the GPD in 2013) represents New Zealand's main source of exports. The country produces 2% of the world 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 (25.5%) and employs more than 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 (69.5%) and of the 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 more than 25% of the services sector. The quality of the transport infrastructures plays an essential role in the country's economic growth.

Foreign trade overview

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 has represented again in 2013 more than 50%. The country's economy is very trade-oriented, with exports of goods and services accounting for more than a third 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 and this country represented in 2013 over 23% of the exportation and 18% of the importation of New Zealand), China (12% and 16%) and the United States (8% and 14%). The European Union represented 11% of New Zealand exportation and 16% of its importation.

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 first attained a surplus in 2009 due to the increase in milk exports and the drop in prices and volume of imports. New Zealand recorded a trade surplus of 400 Million NZD in December of 2013.

Export to Asia has been in the increase for more than 25 years.

FDI

In a context where global foreign investment increased by 10.9% in 2013, in particular in Europe (+25.2%) and in Latin America (+17.5%), its shares directed to developed economies has reached an historic low. Macroeconomic fragility and policy uncertainties are driving investors to caution.

New Zealand's FDI stock, in relation to the GDP, represents practically the double of that of Australia and Canada and three times larger than that of the Scandinavian countries. Most of the FDI inflow stock in New Zealand comes from the United States, Australia, the United Kingdom and the Netherlands. Japan, the APEC countries and the rest of Europe are small investors in New Zealand. 

The flows of FDI in New Zealand reached a high of almost USD 5 billion in 2008. However, these flows have petered out with the economic crisis, mainly due to the decrease in imports of goods. Despite this, the country has maintained a high level of attractiveness, even if the FDI level of 2013 (USD 3 billion) is in the decrease of over USD 1 billion compare to the previous year. 2014 is looking far better in term of potential FDI in the country.

Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).

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