For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
New Zealand's GDP fell to -2.1% in 2020 due to the outbreak of the COVID-19. Nevertheless, growth came back to +5.6% in 2021 before decreasing to 2.3% in 2022. It should only reach 1.9% in 2023 and 2% in 2024 according to the updated IMF forecasts from January 2023. The country relies heavily on consumption to bolster its GDP, although low interest rates, a benevolent fiscal and monetary policy, and increases in real wages due to declining unemployment also factor into its economic growth. Its proximity to Asia and Australia, and strong agricultural sectors also strengthen the economy. The country's entrepreneurial environment is one of the world’s most efficient and competitive.
According to the IMF, the government balance closed at -5% of GDP in 2021 and -4.8% in 2022 and is expected to be reduced to -2.2% and then -1.4% in 2023 and 2024 respectively. Due to the pandemic, the national debt increased sharply from 43.2% of GDP in 2020 to 50.8% of GDP in 2021 and 56.6% in 2022. It is projected to increase again in 2023 to 58.6% before reaching 57.9% in 2024. The inflation rate remained low in 2021 at 3.9% but reached 6.3% in 2022. It is expected to come down to 3.9% and 2.6% over the next two years according to the latest World Economic Outlook of the IMF (January 2023). Inflation pressures have intensified over the past year as the pandemic has disrupted both demand and supply, and reached a 30-year high in February 2022 (New Zealand Treasury, 2022). Economic challenges include dependence on foreign investment, high household and corporate debt, reliance on Chinese demand, insufficient skilled workers, low R&D, and shortage of housing. The economy is also vulnerable to international commodity prices, particularly dairy and meat. Strong public funds have been allocated to reconstruction of roads, railways, and the KiwiBuild Programme. Furthermore, Government has restricted access to low-skill workers and student visas to ease housing demand, which triggered fears of worker shortage and lowered population growth.
In 2023, the country’s most immediate challenge remains related to the economic, social and public health impacts of the COVID-19 pandemic as well as the recovery from severe weather events and the consequences of the war in Ukraine. The unemployment rate increased from 4.2% in 2019 to 4.6% in 2020 but came down to 3.8% in 2021 despite the negative economic impact of the COVID-19 pandemic, and 3.4% in 2022. It is expected to reach 3.9% in 2023 and 4.1% in 2024. Some key social issues faced by the New Zealander government include dealing with an ageing population and increasing health care costs, boosting employment and household incomes, reducing teen pregnancy and child poverty, and increasing housing affordability.
|Main Indicators||2020||2021||2022 (E)||2023 (E)||2024 (E)|
|GDP (billions USD)||210.09||249.31||241.94||251.97||251.40|
|GDP (Constant Prices, Annual % Change)||-1.5||6.1||2.4||1.1||0.9|
|GDP per Capita (USD)||41,309||48,778||47,208||48,827||48,343|
|General Government Balance (in % of GDP)||-4.3||-4.4||-5.3||-4.5||-3.1|
|General Government Gross Debt (in % of GDP)||43.3||50.1||52.8||49.9||45.5|
|Inflation Rate (%)||1.7||3.9||7.2||5.5||2.6|
|Unemployment Rate (% of the Labour Force)||4.6||3.8||3.3||4.3||5.3|
|Current Account (billions USD)||-2.18||-14.91||-21.49||-21.60||-18.15|
|Current Account (in % of GDP)||-1.0||-6.0||-8.9||-8.6||-7.2|
Source: IMF – World Economic Outlook Database , Latest available data
Note: (e) Estimated Data
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 represented 5.7% of GDP and 6% of the total workforce in 2022 (World Bank, 2023). 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 represented 20.4% of GDP and 19% of the workforce in 2022 (World Bank, 2023). Main industries include log and wood articles, food processing, manufacturing, mining, transportation equipment, construction, aluminium production, and paper products. Prefabricated homes figure to factor strongly in New Zealand's housing and urban development programme.
The services sector represented 65.6% of GDP and employed 75% of the population in 2022 (World Bank, 2023). 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.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||5.8||19.3||74.9|
|Value Added (in % of GDP)||5.7||20.4||65.6|
|Value Added (Annual % Change)||3.3||-2.1||-1.0|
Source: World Bank - Latest available data.
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|New Zealand Dollar (NZD) - Average Annual Exchange Rate For 1 MUR||0.04||0.04||0.04||0.04||0.04|
Source: World Bank - Latest available data.
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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.
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.
Foreign trade is an essential element of New Zealand's economy, which is one of the most open economies in the world. Trade represented 49% of GDP in 2021 (World Bank, 2023). In 2022, the main export goods of the country were milk and dairy products (25.5% of all exports), meat (6%), wood (4.9%), fruits (3.7%), while the main imported commodities include Petroleum oils and oils obtained from bituminous (9.6%), Motor cars and other motor vehicles principally (7.8%), Telephone sets, incl. telephones for cellular (2.5%), Motor vehicles for the transport of goods (2.5%) and Automatic data-processing machines and units (2.0%).
New Zealand's biggest partners are China (28.2% of all exports in 2022), Australia (12%), the United States (10.9%), Japan, and South Korea. China was also the main supplier of goods and services of the country (23.2% of all imports in 2022), with Australia (11.1%), the United States (9%) and Japan (6.2%).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. Additionally, the government is currently seeking trade deals with the EU and the UK.
Exports in New Zealand rose 13% year-on-year to a record high of 6.1 billion NZD in December 2021, boosted by sales of dairy products (Statistics New Zealand, 2022). In 2021, merchandise exports increased from 38.91 billion USD in 2020 to 44.75 billion USD, and imports increased from 37.15 billion USD in 2020 to 49.85 billion USD. The trade balance (including services) went from a positive territory in 2020 (+2.44 billion USD) to a deficit of 8.08 billion USD in 2021.
|Foreign Trade Indicators||2017||2018||2019||2020||2021|
|Imports of Goods (million USD)||40,125||43,793||42,363||37,152||49,855|
|Exports of Goods (million USD)||38,075||39,673||39,517||38,919||44,758|
|Imports of Services (million USD)||12,804||14,820||15,503||11,100||13,356|
|Exports of Services (million USD)||15,997||17,527||17,236||11,580||9,378|
|Imports of Goods and Services (Annual % Change)||7.2||3.9||1.0||-15.9||17.3|
|Exports of Goods and Services (Annual % Change)||3.6||2.8||-0.2||-17.6||1.4|
|Imports of Goods and Services (in % of GDP)||26.6||27.9||27.0||22.3||26.6|
|Exports of Goods and Services (in % of GDP)||27.6||27.9||27.3||21.9||22.5|
|Trade Balance (million USD)||-1,503||-3,523||-2,437||1,850||-4,278|
|Trade Balance (Including Service) (million USD)||2,200||-163||193||2,440||-8,085|
|Foreign Trade (in % of GDP)||54.2||55.8||54.3||44.2||49.1|
Source: WTO – World Trade Organisation ; World Bank , Latest Available Data
(% of Exports)
|See More Countries||39.6%|
(% of Imports)
|See More Countries||44.3%|
Source: Comtrade, Latest Available Data
|45.6 bn USD of products exported in 2022|
|Milk and cream, concentrated or containing added...Milk and cream, concentrated or containing added sugar or other sweetening matter||15.0%|
|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 sheep or goats, fresh, chilled or frozenMeat of sheep or goats, fresh, chilled or frozen||6.0%|
|Meat of bovine animals, frozenMeat of bovine animals, frozen||5.9%|
|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.)||4.9%|
|See More Products||62.0%|
|54.9 bn USD of products imported in 2022|
|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||10.0%|
|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)||7.8%|
|Motor vehicles for the transport of goods, incl....Motor vehicles for the transport of goods, incl. chassis with engine and cab||2.5%|
|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)||2.5%|
|Automatic data-processing machines and units...Automatic data-processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s.||2.0%|
|See More Products||75.2%|
Source: Comtrade, Latest Available Data
To go further, check out our service Import Export Flows.
|17.2 bn USD of services exported in 2019|
|Personal travelPersonal travel||56.46%|
|Business travelBusiness travel||4.99%|
|15.3 bn USD of services imported in 2019|
|Personal travelPersonal travel||23.86%|
|Business travelBusiness travel||4.92%|
Source: United Nations Statistics Division, Latest Available Data
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.).
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.
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Latest Update: September 2023