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Economic outlook

Mr Speaker,

New Zealand's economic outlook is positive.

Treasury is forecasting real GDP growth of around 2.9 per cent over the coming year, and 2.8 per cent on average over the five years to June 2020.

Over 200,000 more people are in work now than three years ago, and another 170,000 new jobs are expected by 2020.

Over that period, the unemployment rate is expected to drop to 4.6 per cent and the average wage is forecast to rise to $63,000 a year.

Only a handful of developed economies enjoy such a positive outlook.

Strong population growth is both an indicator of New Zealand's economic performance and a contributor to it.

For the first time in a generation, we have a net annual movement of people into New Zealand from Australia - rather than an exodus of Kiwis across the Tasman.

Consumer spending and services exports are two other key factors driving economic growth.

Further impetus is apparent in a large pipeline of construction projects, and low interest rates should continue to stimulate investment.

Certainly, times are challenging for our dairy farmers, who are finishing another season facing depressed prices.

But elsewhere, New Zealand is reaping the benefits of an increasingly diversified economy.

Total exports increased by almost $2 billion last year.

Tourism, the beef sector, ICT, wine and much of the manufacturing sector are all performing well.

Overall, nominal GDP is expected to be $17 billion higher over the five years to June 2020, compared to the Half-Year Update, and this flows into higher-than-expected tax revenue.

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