New Zealand's Economy

820 WordsOct 11, 20084 Pages
Economic Structure of New Zealand New Zealand has a mixed economy which is mostly based on the free market principles. It is dependent on international trade with countries like Australia, USA, China, and Japan, and focused on specific sectors like tourism, agriculture, manufacturing, and financial services. Exporting goods and services takes about one third of real expenditure GDP. Some of the country’s natural energy resources include coal, natural gas and some oil reserves, geothermal fields, and climate conditions that are substantial for hydro-electric development. In 2007, power from renewable resources such as wind and water, accounted for 60% of total electricity production, and geothermal making up the rest of percentage,…show more content…
The outlook of the country’s economy is closely related to the global economic outlook and stability. If the global growth maintains a strong level, the people of New Zealand should be resilient to the changes in order to continue the developments and maintain economic stability. New Zealand economy moved from the agriculture-based to free market economy, and passed through many challenges. Even though the GDP was growing due to the reforms and some government policies like privatization of the government-owned assets and Public Finance Act of 1989, the annual average percentage change is actually decreasing, which means the GDP growth is slowing down. Also, the country is dependent on the agriculture products and their exports, which takes large portions of money especially when the inflation is relatively high in 2008 (about 4%). The country needs to expand their manufacturing industries and increase their domestic activity in order to move further away from agricultural dependency. Overall, New Zealand economy performs successfully, especially their dealing with debts which fell from 49% in 1993 to 2.1% in 2006 (net debt). Hopefully in the future, the country will face lower inflation and increased domestic
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