Economic and Political Overview

flag New Zealand New Zealand: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response


Economic Indicators

Thanks to exemplary pandemic management, New Zealand rebounded quicker than many other advanced economies. This resilience bolstered economic activity, complemented by robust investment and consumption, facilitated by generous fiscal and monetary support. However, after considerable policy tightening, the economy slipped into a technical recession, witnessing a 0.1% quarter-on-quarter (seasonally adjusted) decline in real GDP in 2023Q1, following a 0.7% drop in GDP in 2022Q4. For the year as a whole, the IMF estimated growth at 1.1% due to deteriorating terms of trade, elevated debt servicing costs, and subdued consumer sentiment amid declining house prices and a soft labor market. Growth is expected to stay restrained in 2024 (1%) as the impact of monetary tightening unfolds fully, before accelerating to 2.1% in 2025 (IMF).

In May 2023, the government disclosed its revised plan to attain a fiscal surplus by the fiscal year ending June 2026 (FY26), postponing it by a year from the initial schedule. This adjustment was prompted by a less optimistic economic growth and tax revenue outlook, alongside 0.7% of GDP attributed to fiscal costs related to recent floods. Additionally, the government allocated an additional cumulative 1.5% of GDP for the implementation of a new National Resilience Plan. The government deficit was estimated at 5.4% of GDP in 2023 by the IMF; it should remain at the same level this year and decrease to 3.4% by 2025. The debt-to-GDP ratio, at 46.1% last year, is expected to follow an upward trend, reaching 49.9% in 2024 and 52.3% in 2025, as per the IMF. Consumer price inflation began to ease in Q2/2023, averaging an estimated 4.9% over the year. It should return within the Reserve Bank of New Zealand’s 1–3% target range in 2024 (at 2.7%, IMF). Economic challenges include dependence on foreign investment, high household and corporate debt, reliance on Chinese demand, insufficient skilled workers, low R&D, and a shortage of housing. The economy is also vulnerable to international commodity prices, particularly dairy and meat. Strong public funds have been allocated to the reconstruction of roads, railways, and the KiwiBuild Programme.

Labor market conditions remain tight, characterized by record high labor force participation and negligible slack, evidenced by historically low levels of unemployment and underemployment rates. This scenario has led to upward pressure on wages, especially within the services and construction sectors. While the recent surge in migration has alleviated some labor market strain, expectations for wage growth, particularly in the short term, remain elevated. Unemployment was estimated at 3.8% in 2023, from 3.3% one year earlier. It is forecast to increase to 4.9% this year (IMF). Some key social issues faced by the New Zealand government include dealing with an ageing population and increasing health care costs, boosting employment and household incomes, and increasing housing affordability.

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 242.35249.04257.63266.77277.69
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 47,28447,53748,53149,64551,049
General Government Balance (in % of GDP) -5.1-4.9-4.2-2.8-1.9
General Government Gross Debt (in % of GDP) 47.245.947.448.748.8
Inflation Rate (%)
Unemployment Rate (% of the Labour Force)
Current Account (billions USD) -21.27-17.08-15.53-14.27-13.31
Current Account (in % of GDP) -8.8-6.9-6.0-5.4-4.8

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

New Zealand's economy is based on agriculture and services such as tourism, retail, and wholesale trade. The agricultural sector is the largest industry in the country, with pastoral farming and horticulture being the most important categories. Agriculture represents 5.7% of GDP and 6% of the total workforce (World Bank, latest data available). Main agricultural products include dairy (the country is the 7th largest milk producer in the world in 2023), meat, wood, fruit (mainly peaches, plums, nectarines, drupe, cherries, apricots, and kiwi), vegetables, seafood, wheat, and barley. New Zealand also has a thriving wine industry and is rich in many natural resources, in particular gas, oil, and coal. On average, migrants make up 15% of the agricultural workforce in New Zealand.

Industry represents 19.7% of GDP and 21% of the workforce (World Bank). Main industries include log and wood articles, food processing, manufacturing, mining, transportation equipment, construction, aluminum production, and paper products. The manufacturing sector as a whole is estimated to account for 9% of GDP. The construction industry plays a vital role in the country's economy, contributing over NZD 17.5 billion to the GDP for the year ending September 2023 (Statista).

The services sector accounts for 66.7% of GDP and employs 73% of the active population (World Bank). Main services include financial services, real estate services, and tourism - which is one of the most important sources of foreign currency. Other important sectors include retail and wholesale trade, restaurants, and hotels. According to the latest figures from the national statistics institute, in 2023, the overall tourism expenditure amounted to NZD 37.7 billion, marking a surge of 39.6% (NZD 10.7 billion) compared to the preceding year. International tourism expenditure soared by 456.9% (NZD 8.9 billion) to reach NZD 10.8 billion. As per the banking sector, By 2023, there were 27 registered banks functioning in the country, as per the Reserve Bank of New Zealand. Similar to the banking sector in Australia, New Zealand is predominantly controlled by four major banks: ANZ, ASB, BNZ, and Westpac, all of which are Australian-owned. In 2022, banks made a direct contribution of NZD 9.1 billion to the New Zealand economy (data NZ Banking Association).

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 6.1 20.0 73.9
Value Added (in % of GDP) 5.7 19.7 66.7
Value Added (Annual % Change) -0.5 3.9 5.9

Source: World Bank - Latest available data.


Find more information about your business sector on our service Market Reports.

Monetary Indicators 20162017201820192020
New Zealand Dollar (NZD) - Average Annual Exchange Rate For 1 MUR

Source: World Bank - Latest available data.


Find out all the exchange rates daily on our service Currency Converter.

Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

World Rank:
Regional Rank:

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation


Business environment ranking


The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

World Rank:

Source: The Economist Intelligence Unit - Business Environment Rankings 2021-2025


Country Risk

See the country risk analysis provided by Coface.


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Foreign Trade in Figures

Foreign trade is an essential element of New Zealand's economy, which is one of the most open economies in the world. Trade represents around 54% of GDP (World Bank, latest data available). The country mainly exports agricultural products. In 2022, exports were led by milk (15%), butter (6.2%), sheep meat (6%), bovine meat (5.9%), and wood (4.9%); whereas imports included petroleum oils (10%), motor cars (7.8%), vehicles for the transport of goods (2.5%), and telephones (2.5% - data Comtrade).

New Zealand's major export partners in 2022 were China (28%), Australia (12.1%), the United States (10.8%), Japan (5.8%), South Korea (3.7%), and Indonesia (2.9%). On the other hand, imports came chiefly from China (23.1%), Australia (11.1%), the United States (8.9%), South Korea (6.4%), and Japan (6.3% - data Comtrade). The country is a founding member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). A Regional Comprehensive Economic Partnership (RCEP) - the world’s largest trade agreement - was also signed in 2020 which includes 7 of New Zealand top 10 trading partners and 16 countries in total: Australia, Brunei, Cambodia, China, India, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, Philippines, Singapore, South Korea, Thailand and Vietnam, and could eventually replace the CPTPP. Moreover, New Zealand signed a free trade agreement with the UK on 28 February 2022 and the European Union concluded negotiations for a comprehensive trade agreement with New Zealand on 30 June 2022, which was signed on 9 July 2023.

According to WTO data, in 2022, New Zealand’s goods exports totalled USD 45.1 billion against USD 54.2 billion in imports (+0.7% and +8.7% y-o-y). As per services, the figures stood at USD 11.4 billion and USD 16.8 billion, respectively. The country’s trade deficit was estimated at 5.3% of GDP in the same year by the World Bank. According to Stats NZ, New Zealand's annual goods exports were valued at USD 41.9 billion in the year ending December 2023, reflecting a 4.5% decrease from the preceding year, according to the statistics department Stats NZ on Monday. Over the same period, imports were valued at USD 50.21 billion, down 5%, resulting in an annual trade deficit of USD 8.3 billion in the year ending December 2023, compared with a deficit of USD 8.91 billion in the year ending December 2022, the largest annual deficit since the record began.

Foreign Trade Indicators 20192020202120222023
Imports of Goods (million USD) 42,36337,15249,85554,21949,997
Exports of Goods (million USD) 39,51738,37744,77745,10241,483
Imports of Services (million USD) 15,56811,45213,72217,16518,457
Exports of Services (million USD) 17,41711,8949,86511,24016,498
Imports of Goods and Services (Annual % Change) 1.0-15.917.3n/an/a
Exports of Goods and Services (Annual % Change) -0.2-17.61.4n/an/a
Imports of Goods and Services (in % of GDP)
Exports of Goods and Services (in % of GDP) 27.321.722.2n/an/a
Trade Balance (million USD) -2,4371,478-4,133-7,750n/a
Trade Balance (Including Service) (million USD) 1932,054-8,061-13,865n/a
Foreign Trade (in % of GDP) 54.444.048.2n/an/a

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data


Main Partner Countries

Main Customers
(% of Exports)
China 26.9%
Australia 12.9%
United States 12.1%
Japan 5.5%
South Korea 3.5%
See More Countries 39.2%
Main Suppliers
(% of Imports)
China 20.7%
Australia 10.8%
United States 9.7%
South Korea 7.5%
Japan 6.8%
See More Countries 44.4%

Source: Comtrade, Latest Available Data


Main Products

42.2 bn USD of products exported in 2023
Milk and cream, concentrated or containing added...Milk and cream, concentrated or containing added sugar or other sweetening matter 14.0%
Butter, incl. dehydrated butter and ghee, and...Butter, incl. dehydrated butter and ghee, and other fats and oils derived from milk; dairy spreads 6.2%
Meat of bovine animals, frozenMeat of bovine animals, frozen 5.7%
Meat of sheep or goats, fresh, chilled or frozenMeat of sheep or goats, fresh, chilled or frozen 5.4%
Wood in the rough, whether or not stripped of bark...Wood in the rough, whether or not stripped of bark or sapwood, or roughly squared (excl. rough-cut wood for walking sticks, umbrellas, tool shafts and the like; wood in the form of railway sleepers; wood cut into boards or beams, etc.) 4.7%
See More Products 64.0%
50.5 bn USD of products imported in 2023
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 13.9%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 8.4%
Telephone sets, incl. telephones for cellular...Telephone sets, incl. telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, incl. apparatus for communication in a wired or wireless network [such as a local or wide area network]; parts thereof (excl. than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528) 2.8%
Motor vehicles for the transport of goods, incl....Motor vehicles for the transport of goods, incl. chassis with engine and cab 2.5%
Turbojets, turbopropellers and other gas turbinesTurbojets, turbopropellers and other gas turbines 2.5%
See More Products 69.9%

Source: Comtrade, Latest Available Data


To go further, check out our service Import-Export Flows.


Main Services

Source: United Nations Statistics Division, Latest Available Data

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Sources of General Economic Information

Ministry of Economic Development
Ministry of Business, Innovation and Employment
Ministry of Foreign Affairs and Trade
Statistical Office
Stats NZ
Central Bank
Reserve Bank of New Zealand
Stock Exchange
New Zealand Stock Exchange
Search Engines
Yahoo! New Zealand
Acess NZ
Economic Portals

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Political Outline

Current Political Leaders
Queen: Charles III (since 8 September 2022)
Governor-General: Cindy Kiro (since 21 September 2021) 
Prime Minister: Christopher Luxon (since 27 November 2023)
Next Election Dates
General elections: October 2026
Main Political Parties
New Zealand has a multi-party system and the main political parties are:

- National Party: centre-right, conservative, liberal
- Labour Party: centre-left, social-democratic, social equality and universal rights

Other parties include:

- Green Party: left-wing, social-democratic
- New Zealand First: centre, conservative, nationalist, populist
- Maori Party: centre-left, maori rights
- ACT: right-wing, liberal

Type of State
Parliamentary democracy and Constitutional monarchy within the Commonwealth.
Executive Power
The head of State is the British sovereign represented by the Governor General. The head of Government is the Prime Minister, who is responsible for the legislature and is also the person who appoints the Governor General. The Cabinet is the most senior policy-making body and is led by the Prime Minister - who is the parliamentary leader of the governing party or coalition. The Prime Minister holds executive powers, which include the implementation of the law and running the day-to-day affairs of the country.
Legislative Power
The legislative authority is vested in a unicameral, 121-member House of Representatives. 72 members are directly elected by popular vote in single-member constituencies. These include seven Maori seats and 49 proportional seats chosen from party lists under the Mixt Member Proportional (MMP) system. The other seats are assigned to list Members of Parliament based on each party's share of the total party vote. All members serve three-year terms.

Indicator of Freedom of the Press


The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:

Indicator of Political Freedom


The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Political Freedom:

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House


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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of New Zealand, please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.


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Latest Update: May 2024