Economic trends
After a growth rate of more than 2% in 2005, 2006, and 2007, New Zealand's GDP dropped in 2008-2009 following the slowing down of the global economy. The country showed eighteeen months of negative growth before the GDP settled at 0.1% in the second quarter of 2009. This relative improvement was due to the establishment of an efficient monetary policy (a reduction of the key rate from 8.25% in July 2008, to 2.5% in April 2009), an attractive taxation policy, strong increase of the migration balance in order to stimulate purchase in the real estate market. Activity was highly influenced by the dynamism of the primary sector, and in particular the fishing, forestry and mining industries. Traditionally, New Zealand's economic growth factors are domestic demand and exports.
Per capita GDP is in the process of catching up with the main western European economies. Unemployment, which had been dropping since 2003, has started increasing again following the crisis and could reach 7% in 2010.
In response to the economic recession which hit New Zealand, a recovery plan was adopted particularly aimed at employment, education, tourism, telecommunication, construction and infrastructures.
Main branches of industry
New Zealand is one of the smallest OECD economies still heavily dependent on agricultural products. Agriculture is New Zealand's main source of export. In 2008, dairy products accounted for 21% of New Zealand's total export merchandise. The other main agricultural product exports are meat, wood, fruit and fishing products. New Zealand also has a thriving wine industry. The country is rich in natural resources, in particular gas, petrol and coal.
The service sector accounts for over two-thirds of the GDP and employs nearly 65% of the workforce. Tourism, which has been growing rapidly in recent years, is one of the country's most important sources of foreign-exchange revenue. The sectors of retail and wholesale trade, restaurants and hotels are major components of the New Zeland economy, accounting for about 25% of the services sector. The quality of the transport infrastructures play a critical role in the country's economic growth.
International trade
Foreign trade is an essential element of New Zealand's economy, which is one of the most open in the world. The share of foreign trade in its GDP is more than 60%. The country's economy is very trade-oriented, with the exports of goods and services accounting for 33% of the total output.
The main trade partners (both for imports and exports) are Australia (most of the merchandise circulates freely between the two countries), the United States, Japan, China, Korea and the United Kingdom.
The trade balance went into surplus again in the second quarter of 2009, in spite of the appreciation of the New Zeland dollar due to the increase in milk exports and the drop in import volumes' prices.
The country's main exports are dairy products, meat, wool, machinery, fruits and nuts. The most imported commodities are vehicles, machinery, mineral fuels and oil, electric and electronic equipment, and plastics.
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