29 March 2019
New Zealand: Stabilised Political and Economy Situations
|Currency||New Zealand Dollar|
|Form of government||Constitutional monarchy and parliamentary democracy|
|Major Merchandise Exports (% of total, 2016*)||Major Merchandise Imports (% of total, 2016*)|
|Dairy products (26.1%)||Machinery & electrical equipment (22.8%)|
|Meat products (12.4%)||Transport equipment (18.1%)|
|Forestry products (8.7%)||Mineral fuels (9.4%)|
|Top Three Export Markets (% of total, 2017) ||Top Three Import Markets (% of total, 2017)|
|China (22.3%)||China (18.7%)|
|Australia (16.6%)||Australia (12.2%)|
|US (9.8%)||US (10.8%)|
Sources: Economist Intelligence Unit
New Zealand is a constitutional monarchy and parliamentary democracy, with Queen Elizabeth II titular head of state, represented in the country by the Governor-General. The legislative is a unicameral House of Representatives with 120 members, elected for a three-year term using mixed-member proportional representation. Currently, the government is led by the prime minister and Labour Party’s leader, Jacinda Ardern, who has been in power since October 2017. The country enjoys a stable political environment and ranks highly internationally for its governmental transparency and low levels of corruption. The next general election is due in November 2020.
New Zealand maintains close ties with Australia, and their relationship is formally underpinned by the Closer Economic Relations Trade Agreement signed in 1983. Meanwhile, New Zealand plays an active role in Pacific affairs. It has constitutional ties with the Pacific territories of Niue, the Cook Islands and Tokelau.
|Nominal GDP (USD bn)||185.7||201.2||203.5||204.8||211.1|
|Real GDP growth (%)||4.1||2.7||2.9||2.6||2.0|
|GDP per capita (USD)||39,600*||42,080*||41,880||41,530||42,280|
|Budget balance (% of GDP)||0.9||1.6||2.0||0.8||0.8|
|Current account balance (% of GDP)||-2.3||-2.9||-3.4||-3.5||-3.3|
|Government debt (% of GDP)||32.6||30.8||29.6||28.4||27.3|
Source: Economist Intelligence Unit
New Zealand’s economy has enjoyed a solid expansion since 2011, driven by reconstruction spending after the 2011 and 2016 earthquakes, an accommodative monetary policy, a persistent net migration wave and strong external demand from Asia. However, economic growth has decelerated to 0.3% quarter-on-quarter in Q3 2018, the slowest in nearly five years, tempered by weaker construction activity and food manufacturing. It is widely expected that the central bank would keep its main policy rate on hold to support growth.
The island country is a strong proponent of trade liberalisation and has numerous free trade agreements (FTA), largely with its Asia-Pacific neighbours. These include FTAs with Australia, China, Hong Kong, ASEAN, Malaysia, Singapore, South Korea and Thailand. New Zealand was also the first developed western nation to join the China-initiated Asian Infrastructure Investment Bank.
Hong Kong-New Zealand Trade
Total exports from Hong Kong to New Zealand increased by 24.1% from HK$4,170 million in 2017 to HK$5,175 million in 2018. The top three export categories to New Zealand were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+12.8%), (2) power generating machinery and equipment (+3144.6%) and (3) office machines and automatic data processing machines (+0.4%), which represented 56.3% of total exports to New Zealand.
Source: Census and Statistics Department of Hong Kong
HKECIC Underwriting ExperienceThe HKECIC imposes no restrictions on covering buyers in New Zealand. For 2018, the number and amount of credit limit applications decreased by 13.7% and 46.9% respectively, while insured business increased by 4.5%. Major insured products were clothing, printed matters and food, which represented 66.3% of HKECIC’s insured business on New Zealand. The Corporation’s underwriting experience on New Zealand has been satisfactory, with one claim payment case reported from January to December 2018.