Solid growth for NZ despite fragile world economy

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The New Zealand economy continued to grow solidly in the September quarter, posting a higher than expected 1.1 per cent growth rate for the quarter and 3.5 per cent over the last year, Finance Minister Steven Joyce says.

“New Zealand’s focus on developing a strong and open economy is delivering good results for Kiwi families, especially relative to most of the rest of the developed world,” Mr Joyce says.

New Zealand’s economic growth in the year to September was the fifth strongest in the OECD ahead of Australia (1.8 per cent), the USA (1.6 per cent), Canada (1.3 per cent) and the Euro Area (1.7 per cent).

“We are starting to see the benefits of a clear and stable focus on economic fundamentals coupled with a determination to build a competitive environment from which Kiwi companies can succeed on the world stage.”

Growth in the quarter was strong across 13 of 16 industries, including:

Business services (up 2.0 per cent
Transport, postal, and warehousing (up 3.7 per cent)
Construction (up 2.1 per cent)
Manufacturing (up 1.2 per cent)

“It’s hard to overstate the importance of key service sector exports like tourism and education in New Zealand’s economic success in recent years. They have taken up a lot of the shortfall as the dairy sector went through its downturn. Other food sectors and hi-tech exports have also contributed significantly,” Mr Joyce says.

The Current Account deficit was unchanged at 2.9 per cent for the year, well below the long-run average. New Zealand’s external debt was 58 per cent of GDP, compared with 83.8 per cent of GDP back before the GFC in 2008.

Treasury’s half-yearly Fiscal Update predicts growth to average 3 per cent per year out to 2021, with a further 150,000 jobs expected to be added to the New Zealand economy over the same period.

“The future is looking positive for New Zealand, but these are of course just forecasts. The world remains an uncertain place and it is important that the Government, businesses and households collectively keep our feet on the ground and not go crazy with the credit card. If we work hard, maintain our economic programme and increase our competitiveness we can continue to improve the outcomes for Kiwi families,” Mr Joyce says.