Economic Fact File on New Zealand Economy

1 Real GDP, 1955-2008 SNZ

2 Growth in real GDP per capita, 1975-2008 SNZ

3 Real average weekly earnings, 1989-2008 SNZ

4 Labour productivity growth, 1978-2008 SNZ

5 Unemployment rate, 1986-2008 SNZ

6 Inflation, 1975-2008 SNZ

7 Balance of payments, 1988-2008 SNZ

8 Annual saving and accumulated net worth

8A National Saving, 1972-2007 SNZ

8B Household net worth, 1979-2007 RBNZ

9 Government spending

9A - Core Crown expenses, 1994-2013 NZ Treasury

9B - Total government outlays, 1995-2009 OECD

10 Crown operating balance, 1994-2013 NZ Treasury

11 Net migration from New Zealand to Australia, 1979-2008 SNZ

12 NZ competitiveness: relative unit labour costs, 1990-2007 OECD

13 External trade ratios to real GDP 1988-2008 SNZ

Table of Contents

Part A: New Zealand Statistical Series

Part B: International Comparisons

1 GDP capita in OECD countries 2006 OECD

2 NZ GDP per capita relative to the OECD OECD

Part C: Other analyses

1 Click here for ‘OECD ladder too steep for NZ to climb’, National Business Review BR October 2008

2 Click here for ‘New Zealand’s economic growth prospects: Too much snake oil’, NZIER, November 2005

3 Trans Tasman per capita incomes, 2007 SNZ & Australian Bureau of Statistics

4 Real GDP per capita growth rates Australia and NZ, 1981-2008 IMF

5 United Nations Human Development Index, 2005 United Nations

6 Country scores for Economic Freedom Heritage Foundation/Wall St Journal

7 Global Competitiveness scores 2008-2009 World Economic Forum

8 Burden of government indicators, 2008 World Economic Forum

(a) New Zealand in the World

3 Click here for the United Nations Human Development Index 2007-08

4 Click here for the IMF World Economic Outlook October 2008

5 Click here for the World Bank World Development Indicators 2008

6 Click here for the World Bank Doing Business 2009

7 Click here for the Economist Intelligence Unit Quality of Life Index

8 Click here for Global Competitiveness explained by Wikipedia

9 Click here for the World Economic Forum Global Competitiveness Report 2008-09

10 Click here for Economic Freedom explained by Wikipedia

11 Click here for the Heritage-Wall St Journal Index of Economic Freedom 2008

12 Click here for the Economic Freedom of the World 2008 - Fraser Institute

(b) New Zealand in the OECD

13 Click here for OECD in Figures 2007

14 Click here for OECD Factbook 2008

15 Click here for OECD Statistical Annex Economic Outlook June 2008

16 Click here for OECD Compendium of Productivity Measures

17 Click here for Statistics New Zealand New Zealand in the OECD

(c) Other New Zealand sources

18 Click here for Statistics New Zealand datasets

19 Click here for the Treasury-MED Economic Development Indicators 2007

20 Click here for the Pre-Election Economic and Fiscal Update 2008

21 Click here for Treasury's Fiscal Strategy Model Forecasts for the Pre-Election Economic and Fiscal Update 2008

22 Click here for the table of contents for the Reserve Bank's Economic Indicators

23 Click here for 9 key graphs on the Reserve Bank's website

Part D: Links

Part A: New Zealand Statistical Series

Source: Statistics New Zealand, series SNBA.S2AZAT linked to SNCA.S1RB01 at 1988

$0

$20

$40

$60

$80

$100

$120

$140

$160

1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Years Ended March

Co

nst

an

t 1

99

5-9

6 D

olla

rs (

$ b

n)

1968 recession,devaluation, fall in wool pricesnil general wage order

Stagflation after 1973-74 oil price shock

1991 Budget, ECA

Long recession after October 1987 sharemarket crash and collapseof Lange-Douglas government

'Asian crisis' slowdown

Growth during early Lange-Douglas reforms

Treasury pre-election forecasts for 2009

Actuals

Current recession

Figure 1: Real Gross Domestic Product (GDP)

Annual percentage change 3 year mov avg (annual percentage change)

Source: Statistics New Zealand, Table E.1.2 in long-term series (col AK) linked at 1988 to SNCA.S6RB01NZ

Figure 2: Growth in Real GDP Per Capita

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007

Years Ended March

Ann

ual p

erce

ntag

e ch

ange

s

Deep recessions

Persistent deficits, increases in debt, inflation and rising unemployment

Shallow recession

Slowing growth trend, higher inflation

MMP & resumption of big spending increasesStrong growthlower inflation,fiscal restraint

Centered 3 year moving average

Years Ended March

Source: Statistics New Zealand, EESQ.SBAZ9Z & CPIQ.SE9A

Figure 3: Real Average Weekly Earnings (full-time equivalent basis)

$650

$675

$700

$725

$750

$775

$800

$825

$850

$875

$900

Mar

-89

Mar

-90

Mar

-91

Mar

-92

Mar

-93

Mar

-94

Mar

-95

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

June

200

6 D

olla

rs (

CP

I)

Little overall real wage growth as strongemployment growth reduces the rate of unemployment

4-quarter moving average

A

Figure 4: Labour Productivity Growth

Source: Statistics New Zealand, measured sector, S1LMSI

Years Ended March

1.7%1.4%

2.9%2.5%

2.8%

1.1%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Ann

ual p

erce

ntag

e ch

ange

s (b

lue

line)

and

cyc

le a

vera

ge g

row

th ra

te

1978-82 1982-85 1985-90 1990-97 1997-2000 2000--07 1978-2007 Annual changes

Horizontal lines show the average growth rates during each cycle, as published by SNZ

This growth cycle associated with labour shedding

These two growth cycles associated with positive employment growth

Slowest growth cycle in 3 decadesbut highest employment growth

Weak growth cycles, extensive economic controls

Figure 5: Unemployment Rate (seasonally adjusted)

10.9

0

2

4

6

8

10

12

Statistics New Zealand: Household Labour Force Survey: HLFQ.S1F3S

Pe

rce

nt o

f la

bo

ur

forc

e

Sept 1991

Decline resumes

Employment Contracts Act

Steep fall to 1996

Asian crisis

Statistics New Zealand: Household Labour Force Survey: HLFQ.S1F3S

Figure 5: Unemployment Rate (seasonally adjusted)

Sept 1991

10.9

%

%

%

%

%

%

%

Figure 6: Consumer Price Inflation and Inflation Expectations

Source: Statistics New Zealand, CPIQ.SE9A & Reserve Bank of NZ Survey

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Inflation Expectations Two Years Ahead

Wage & Price Freeze

New price stability goal in Reserve Bank Act 1989

PTA eased, higher inflation0-2% pa inflation largely achieved

Inflation expectations nowhighest since 1991

Source: Statistics New Zealand: BoP BOPA.S5AC3, GDP (E) SNCA.S1NB15

-10%

-9%

-8%

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Pe

rce

nt

of

no

min

al G

DP

Years Ended March

Figure 7: Balance of Payments: Current Account Balance as a Percent of GDP

Years Ended March

Figure 8A: National Savings as a Percent of GDP

Source: Statistics New Zealand: Savings SNCA.S2NB08Z; GDP (E) SNCA.S1NB15

Percent of nominal GDP

Years Ended March

-2%

0%

2%

4%

6%

8%

10%

12%

14%

1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006

0%

100%

200%

300%

400%

500%

600%

700%

Pe

rce

nt

of

ne

t d

isp

osa

ble

inco

me

Source: Reserve Bank of New Zealand, table 2 in household financial assets and liabilities: annual series 1978 to 2007. December values for net worth.

Figure 8B: Household Net Worth as a Percent of Net Disposable Income

Source: Reserve Bank of New Zealand, table 2 in household financial assets and liabilities: annual series 1978 to 2007

Source: New Zealand Treasury, fiscaltimeseries - 1972-2008 linked to Medium Term Fiscal Strategy Pre-Election Update 2008

ForecastActuals

IFRS

Figure 9A: Core Crown Expenses

GAAP

Years Ended June

Per

cent

of n

omin

al G

DP

26%

27%

28%

29%

30%

31%

32%

33%

34%

35%

IFRSGAAP

Actuals Forecast

Figure 9B: New Zealand General Government Total Outlays (includes local government spending and capital outlays)

36

37

38

39

40

41

42

43

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Years

Per

cent

of n

omin

al G

DP

Source: OECD: Economic Outlook 83, June 2008

%%

%

%

%

%

%

%

%

Source: OECD: Economic Outlook No 83, June 2008

-2%

-1%

0%

1%

2%

3%

4%

5%

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Years ended June

Per

cent

of G

DP

Forecast

Actual

GAAP series

Source: New Zealand Treasury, fiscaltimeseries - 1972-2008 linked to Medium Term Fiscal Strategy Pre-Election Update 2008

Figure 10: Total Crown balance as a percentage of GDPOperating Balances before Gains and Losses (1994 - 2013)

IFRS series

Percent of nominal GDP

Years Ended June

Source: Statistics New Zealand, EMIM.S1DEA & EMIM.S2DEA

Figure 11: Net Permanent & Long-term Loss to Australia

Figure 11: Net Permanent & Long-term Loss to Australia

32,17331,319

33,929

-5,000

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Years Ended September

Ne

t lo

ss (

+)

or

ga

in (

-)

The cumulative net outflow during these 30 years is 495,883

Years Ended September

The cumulative net outflow during these 30 years is 495,883

Figure 12: New Zealand Competitiveness: Relative Unit Labour Costs(an increase in this index is a reduction in competitiveness)

Source: OECD, Economic Outlook, No 83, June 2008, annex table 43

80

90

100

110

120

130

140

150

160

170

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Years

Ind

ices 2

000 =

100

NZ 13th in world for Global Competitiveness

Loss of competiveness (NZ 24th in world for 2008 - 2009) (See Fig Part B)

Figure 13: External Trade Ratios to Real GDP

Source: Statistics New Zealand, SNCQ.S4RP60, SNCQ.S4RP61 & SNCQ.S1RB15

20%

22%

24%

26%

28%

30%

32%

34%

36%

38%

40%

Mar

-88

Mar

-89

Mar

-90

Mar

-91

Mar

-92

Mar

-93

Mar

-94

Mar

-95

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Pe

rce

nt

of

GD

P in

19

95

-96

pri

ces

Exports of Goods & Services in 1995-96 prices Imports of Goods & Services in 1995-96 prices

Loss of competitiveness, rise in imports relative to exports

Part B: International Comparisons

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

US

$ P

urch

asin

g P

ower

Par

ity Bottom half of OECD

34,700 (12th)

26,300 (22nd)

Australia

New Zealand

OECD Average

Figure 1: GDP Per Capita in OECD Countries 2006

Source: OECD in Figures 2007

70%

75%

80%

85%

90%

95%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

NZ

as

a P

erc

en

t o

f th

e U

nw

eig

hte

d O

EC

D A

vera

ge

19

2121

20

19

19

2121

21 21

21

21 22 22

22

22

Greece moves ahead of NZ

Ireland &Spainmove ahead of NZ

NZ rank in OECD

Strong growth after1991 Budget

MMP in 1996Asian crisis

Figure 2: New Zealand GDP per Capita Relative to the Member Countries of the OECD

Source: OECD Fact Book 2008, current prices, US dollars converted using purchasing power parity exchange rates

Figure 3: Trans Tasman Per Capita Incomes 2007

Figure 4: Real GDP Per Capita Growth Rates (in home currencies)

Source: IMF World Economic Outlook October 2008

1994

1998

1991

-6%

-4%

-2%

0%

2%

4%

6%

8%

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Ann

ual P

erce

nt C

hang

es

Australia New Zealand

ForecastsActuals

Australian outlook better2006 - 2013 (8 years)

Debt-fueled growth in NZ

Deeper recession in NZ

Asian crisis hits NZ harder

NZ does better to 2005

Figure 5: United Nations Human Development Index 2005 (Top 40 countries)(encompasses longevity, health, knowledge and GDP per capita)

Source: United Nations 2007-08

Source: United Nations 2007-2008

0.84

0.86

0.88

0.90

0.92

0.94

0.96

0.98

Hum

an D

evel

opm

ent

Inde

x V

alue

NZ 19th

Australia 3rd

Figure 6: Country Scores for Economic Freedom

Source: Heritage - Wall Street Journal 2008 Report

70

72

74

76

78

80

82

84

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Australia New Zealand

Australia's ranking rose from 10th in the world to 4th during this period, while New Zealand's fell from 3rd to 6th.

4.40

4.60

4.80

5.00

5.20

5.40

5.60

5.80

6.00

Source: World Economic Forum, Global Competitiveness Report 2008 -09

Un

its

1st

18th

24th

Figure 7: Global Competitiveness Scores 2008-09 (Top 30 countries)

Source: World Economic Forum, Global Competitiveness Report 2008-2009

Units: 7= best possible score, 1 = worst possible score

Figure 8: Burden of Government

0

1

2

3

4

5

6

7

Singapore Australia New Zealand Venezuela

Source: World Economic Forum, Global Competitiveness Report 2008-09

Su

rve

y re

spo

nse

s 7

= b

est

po

ssib

le s

core

, 1

= w

ors

t p

oss

ible

sc

ore

Waste in govt spending Burden of govt regulation

53rd

16th

1st

65th85th

World rankings (out of 134 countries) are above each bar

134th134th

(Top-ranked country in both respects)

1st

(Bottom in both respects)

Figure 8: Burden of Government

Source: World Economic Forum, Global Competitiveness Report 2008-2009