New Zealand Debt Management Office Accessibility Skip to content. Skip to navigation

New Zealand
Debt Management Office
Publication

New Zealand Economic and Financial Overview 2009

International securities regulations require that visitors read and acknowledge the disclaimer below before accessing information on this web site. Click Acknowledge and Hide Disclaimer below to hide the full disclaimer (requires JavaScript to be enabled).

Disclaimer - New Zealand Debt Management Office Web Site

  1. The information on this web site is issued by the New Zealand Debt Management Office (NZDMO) for informational purposes. It does not contain and is not an invitation or offer to buy or sell securities. Insofar as this web site refers to any offerings of securities, such offerings are directed to countries other than the United States and no offerings are made to persons accessing this web site within Australia.
  2. The NZDMO takes reasonable measures to ensure the quality of the data and other information produced by the NZDMO that is made available on this web site. However, the NZDMO makes no warranty, express or implied, nor assumes any legal liability or responsibility for the accuracy, correctness, completeness or use of any information that is available on or through this web site nor represents that its use would not infringe on privately owned rights. Further information contained on this web site is subject to change, completion or amendment without notice. Nothing contained on this web site is, or shall be relied on as a promise or representation by the New Zealand Government or the NZDMO as to the past or future. The contents of this web site should not be construed as legal, business or tax advice.
  3. This is a protected New Zealand Government web site. It is unlawful to intentionally cause damage to it or to any NZDMO electronic facility or data through the knowing transmission of any program, information, code, or command.
  4. The NZDMO systems to which this web site connects and related equipment are subject to monitoring. Information regarding users may be obtained and disclosed to authorised personnel, including law enforcement authorities, for official purposes. Access to or use of this web site constitutes consent to these terms.
  5. Reference to any specific commercial product, process, or service by trade name, trademark, manufacture, or otherwise does not constitute an endorsement, recommendation, or favouring by the New Zealand government or the NZDMO.
  6. For convenience and informational purposes only, the NZDMO server provides links to other web sites. These sites may contain information that is the copyright of third parties and subject to restrictions on reuse. Permission to use copyrighted materials must be obtained from the copyright owner and cannot be obtained from the NZDMO.
  7. The NZDMO is not responsible for the content of other web sites linked to or referenced from the NZDMO site. The NZDMO neither endorses the information, content, presentation, or accuracy of such web sites, nor makes any warranty, express or implied, regarding these external web sites.
  8. Each page on this web site must be read in conjunction with this disclaimer and any other disclaimer that forms part of it.
  9. By clicking on "Acknowledge and Hide Disclaimer" below, I confirm that I am either:
    1. resident outside of the European Economic Area; or
    2. person acting solely in my capacity as an authorised representative of an entity falling within one of the following descriptions:
      1. a legal entity authorised or regulated to operate in the financial markets, including: a credit institution, or investment firm, an other authorised or regulated financial institution, or insurance company, a collective investment scheme, a collective scheme management company, a pension fund, a pension fund management company, a commodity dealer, or an entity not so authorised or regulated but whose corporate purpose is solely to invest in securities;
      2. a national or regional government, a central bank, an international or supranational institution such as the International Monetary Fund, the European Central Bank, the European Investment Bank or other similar international organisations; or
      3. a legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts.

Disclaimer: The information on this web site is issued by the New Zealand Debt Management Office (NZDMO) for informational purposes. It does not contain and is not an invitation or offer to buy or sell securities. Each page on this web site must be read in conjunction with the disclaimer at http://www.nzdmo.govt.nz.

External Sector

External Trade

External trade is of fundamental importance to New Zealand. Primary sector based exports and commodities remain important sources of the country's export receipts, while exports of services and manufactured products also provide a significant contribution. This, together with a reliance on imports of raw materials and capital equipment for industry, makes New Zealand strongly trade-oriented.

Merchandise Trade

After recording a surplus of $962 million in the year to September 2001, the annual merchandise trade balance fell relatively steadily, recording a record deficit of $7.3 billion in the year to February 2006. Strong growth in the terms of trade helped diminish the deficit to $5.0 billion in the year to September 2008. Growth in export values of merchandise goods slowed to 2.1% in the year to September 2007 but rose to a seven-year high, growing 21.3% (or $42.0 billion) in the year to September 2008. The value of merchandise goods imports is also at a seven-year high, but more subdued than exports, increasing 14.9% to $47.0 billion in the year ended 30 September 2008.

The following table records the total value of exports and imports of goods since 2004.

Balance of External Merchandise Trade
(dollar amounts in millions)
Year to September
Exports Imports Balance
of Trade
Exports as
% of Imports
2004 30,048 34,128 -4,080 88.0
2005 30,770 36,539 -5,769 84.2
2006 33,868 40,051 -6,183 84.6
2007 34,591 40,878 -6,287 84.6
2008  41,968 46,953 -4,985 89.4

(1) Includes re-exports.

Index of Export Volumes
Index of Export Volumes.
Source: Statistics New Zealand

Trade in Services

Trade in services is dominated by tourist flows. The annual level of services export volumes has been in decline since 2005, most likely a result of the high New Zealand dollar having an adverse impact on visitor arrivals and their average expenditure. In the year to September 2008, annual average growth in services exports fell 4.1%.

The services balance recorded in the Balance of Payments registered a surplus of $1,977 million in the year to 30 September 2003. Since then, however, a slowdown in inbound tourism and strong growth in the number of New Zealanders travelling overseas has seen the services balance fall to a deficit for the first time in seven years, recording a deficit of $470 million in the year to September 2008.

The services deficit is expected to increase with slower growth forecast for the world economy but then to begin to narrow from 2010 in a lagged response to the depreciation of the New Zealand dollar over the latter half of 2008.

Terms of Trade

The terms of trade index was 4.4% higher in September 2008 compared with the same quarter in 2007, after having reached the highest level in 33 years in the previous two quarters. The fall in the New Zealand dollar and strong global demand helped export prices to increase 25.1% in the year to September 2008. Over the same period import prices increased 19.7%, chiefly due to increases in oil and oil-related products. From the middle of 2008, oil prices fell more than export prices, helping to maintain New Zealand's terms of trade at a high level. The terms of trade are expected to decline moderately in 2009/10 from recent high levels.

Terms of Trade
    Export Price Index (1) Import Price Index (1) Terms of Trade Index (1)
2004 March 852 -5.1 806 -10.5 1,057 6.1
  June 914 3.2 846 -3.9 1,080 7.2
  September 903 3.8 839 -3.1 1,077 7.3
  December 892 2.9 826 -1.4 1,081 4.4
2005 March 894 4.9 810 0.5 1,105 4.5
  June 899 -1.6 824 -2.6 1,091 1.0
  September 916 1.4 843 0.5 1,087 0.9
  December 899 0.8 848 2.7 1,060 -1.9
2006 March 926 3.6 866 6.9 1,069 -3.3
  June 1,018 13.2 928 12.6 1,097 0.5
  September 1,010 10.3 941 11.6 1,073 -1.3
  December 973 8.2 885 4.4 1,100 3.8
2007 March 970 4.8 869 0.3 1,117 4.5
  June 958 -5.9 854 -8.0 1,122 2.3
  September 990 -2.0 852 -9.5 1,163 8.4
  December 1,045 7.4 873 -1.4 1,197 8.8
2008 March 1,091 12.5 875 0.7 1,247 11.6
  June 1,140 19.0 918 7.5 1,242 10.7
  September 1,238 25.1 1,020 19.7 1,214 4.4

(1) Base: June 2002 = 1,000.

Page top