Economic performance

A country’s rate of economic growth is usually measured by the periodic change in its real Gross Domestic Product (GDP). This is a measure of the volume of goods and services produced by a country, not of the impact of that economic activity. Investment per capita provides a pointer as to whether investment is sufficient to sustain economic growth into the future.

New Zealand has seen a steady increase in real GDP per capita since 1955, reflecting the country’s increased standard of living during this time. Closer examination of the economic growth figures indicates a series of peaks and troughs of increasing intensity since the 1970s.

Real Gross Domestic Product per capita

New Zealand’s real GDP per capita grew from $23,600 in the year ended March 1991 to $27,400 in the year ended March 2001.

The pattern of economic growth shown in Figures 5.1 and 5.2 reflects the impact of several factors, including:

• Britain’s entry to the European Union in the early 1970s, which ended a period of stable and reasonably steady growth after World War II, when New Zealand enjoyed the benefits of a secure premium priced market for its primary produce.
• Falling commodity prices in the 1970s, as New Zealand sought to diversify its export product and market mix, compounded by both the oil price shocks of the 1970s and the likely negative impact on investment of high levels of inflation.
• Economic restructuring in the 1980s that involved removal of tariffs and quantitative trade restrictions, as well as internal deregulation and privatisation of public sector assets. The 1970s and 1980s were periods of slower growth in several of New Zealand’s key overseas markets.
• Some evidence of more buoyant growth in the 1990s, though the dip in 1998 following two unseasonal drought events and the ‘Asian financial crisis’ reflect the extent to which the New Zealand economy depends on overseas trade and investment from overseas, as well as primary production.

Figure 5.1



The downloadable file is in Microsoft Excel 97 format. If you do not have access to Excel 97 or higher you may use the Excel file viewer to view, print and export the contents of this file.
 
Figure5.1.xls  (15 KB)

Figure 5.2

The downloadable file is in Microsoft Excel 97 format. If you do not have access to Excel 97 or higher you may use the Excel file viewer to view, print and export the contents of this file.

Figure5.2.xls (15 KB)

Real capital investment

Over the 19 years covered in Figure 5.3, real capital investment, which includes residential housing, has remained relatively stable as a proportion of real GDP, although there is evidence of some increase in the mid-1990s. Real capital investment expenditure was 20.5 percent of GDP in the year ended March 2001, compared with 19.6 percent in 1991.

Figure 5.3



The downloadable file is in Microsoft Excel 97 format. If you do not have access to Excel 97 or higher you may use the Excel file viewer to view, print and export the contents of this file.

Figure5.3.xls  (14 KB)

Related information

National Accounts

Back to Economic growth and innovation

Back to Contents