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, which makes New Zealand eco-friendly. One of the biggest parts of the economic sectors is service industries like financial services, transportation, tourism, etc. which makes up about two thirds of the GDP. New Zealand’s economy developed throughout decades, coming from agriculture based to free market economy, and this accomplishment started after World War II. New Zealand’s economy is growing and expanding nowadays, but it faced hard years after World War II. After the war, the country had successful years of agriculture-based economy. During 1950’s and 60’s, there was a period of full employment with GDP’s average annual rate of 4%. One of the factors that helped the economical growth at that time was the wool boom of 1951 where New Zealand exported large amounts of wool to USA , which led to high prices, thus higher standard of living. In the 70’s, the wool boom ended and access to key world markets for agriculture became very difficult. Also, the increases in oil prices in 1973 followed with falls in prices for exports, led economy to poorly adapt to the changing world environment. After 1984, some policies and reforms took place in order to achieve low inflation and decent fiscal position. The reforms included the...
Please join StudyMode to read the full document