New Zealand’s Economy Performing Better than Expected
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Most experts suggest that New Zealand is not capable of enjoying the economic growth rates seen in other parts of the world. However, finance minister Bill English has assured economists that New Zealand will return to strength this year, after originally suggesting that the country would start to see improvement in 2014. At this point, New Zealand may be able to sustain long-term growth around 3% per annum without inflationary pressures or supply constraints.
Most experts suggest that New Zealand is not capable of enjoying the economic growth rates seen in other parts of the world. However, finance minister Bill English has assured economists that New Zealand will return to strength this year, after originally suggesting that the country would start to see improvement in 2014. At this point, New Zealand may be able to sustain long-term growth around 3% per annum without inflationary pressures or supply constraints.
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Economic Expansion
ANZ’s chief economist Cameron Bagrie believes this to be true. In his opinion, New Zealand may have finally overcome the initial recovery stage and entered into growth mode. Now unemployment appears to be falling, migration is stronger, and salaries are growing.
With respect to migration, through November 2014, New Zealand attracted 49,800 people, the most ever. On top of that, unemployment for the quarter of September was reduced to 5.4% from 5.6% in June, while wage rates and salary increased by approximately 1.6%. This year, New Zealand’s currency against the Australian dollar reached a new high.
Economic Issues
New Zealand’s economy suffered significantly during the global financial crisis. Since then, it has taken some time for a reasonable level of growth to make its way back. After experiencing serious problems in 2008, New Zealand had to return to the basics.
The government started to focus more on improving productivity, reducing debt and building collaboration among industries. Two years ago, the largest issue that most businesses faced was a lack of demand from consumers. Now, the problem is meeting demand, which requires skilled laborers. This is beneficial in helping unemployment levels fall and wages increase.
Sunny Days Ahead
New Zealand will have some challenges ahead, including high levels of household and national debt, an over-valued property market, and a large current account deficit. Despite these numerous issues, financial experts are starting to feel more positive about New Zealand’s future. It seems that slowly, the area is beginning to turn itself around again, and head in the right direction. Perhaps Peter Jackson will film some more Hobbit movies there.
