After five years in the doldrums the New Zealand economy is on the rebound. At the end of 2013 economists were predicting GDP growth of 3% or more and even the IMF expected growth to pick up to 2.9% – ahead of our Western trading partners (including Australia) and not far behind Asian nations like South Korea and Singapore.
And consumer confidence in New Zealand has climbed to a seven-year high in the monthly ANZ-Roy Morgan survey where the index stands at 135.8, up from 129.4 last month and its highest ever since February 2007. A net 50% of the respondents think it is a good time to buy a major household item, up from 39% last month.
The prevailing sense of optimism is reflected in a piece published this week in the Wall Street Journal where Rebecca Howard writes:
“In a world still limping its way out of the global financial crisis, New Zealand's economy is looking remarkably zippy.
“The small Pacific nation of around 4.5 million people expanded by 3.5% in the this quarter from a year earlier, a good deal faster than many other developed economies, including its larger neighbour Australia.
“The Organisation for Economic development, or OECD, expects New Zealand to grow by 3.3% this year, compared with an estimate of 2.9% for the U.S. and a mere 1.0% in the euro area.
“New Zealand's economy is performing so well that some economists expect the central bank to raise interest rates as early as this month – which would put it among the first developed nations to tighten monetary policy since Lehman Brothers Inc collapsed in 2008 and sparked a global recession.”