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