New Zealand PM Jacinda Ardern says post-Brexit trade deals are a priority ©Jack Taylor/Getty Images
New Zealand PM Jacinda Ardern says post-Brexit trade deals are a priority ©Jack Taylor/Getty Images

Country spotlight: New Zealand

5 April 2019

Population

4,776,966

Area

268,021 km²

The helicopter view

New Zealand has a GDP of US$205.9bn (2017) and one of the most globalised economies in the world.

Economic outlook

The economy grew at its slowest rate in nearly five years (2.6% from 3.2% in 2018) due to dwindling construction activity and food manufacturing. Inflation is projected to increase to 2% in 2019, thanks to higher import prices and domestic wage growth.

Biggest investors

The country is dependent on foreign investment – which comes from Canada, Australia, Hong Kong, Japan and Cayman Islands – and FDI stock in relation to GDP represents double that of Australia and Canada. FDI flows exceeded US$3.5bn in 2017.

Strengths

New Zealand is rated number one for ‘ease of doing business’ by the World Bank because of its open and business-friendly economy, political stability and an advantageous tax policy – and was number two in the Transparency International corruption perceptions index (CPI) 2018.

Supply chain issues

Challenges include the country’s remote location and its mix of rural and city areas straddling two islands. But New Zealand still shipped US$38.4bn of goods in 2018 – and imports are many and varied.

Challenges

Brexit will cause significant disruption for New Zealand businesses dealing with the UK. But prime minister Jacinda Ardern has made clear she is keen to enter post-Brexit UK trade agreements.

Bottom line

Since the early 1980s, New Zealand has evolved from a post-colonial, agrarian economy to an industrialised, free-market economy that can compete globally. But expanding its network of free trade agreements remains a foreign policy priority.

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