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Budget 2017 Home Page Budget Speech - Budget 2017

Economic Outlook

Mr Speaker, the New Zealand economy is performing well.

We have experienced positive growth in all but one quarter of the last six years. We are at the moment growing faster than the United States, the UK, Australia, the EU, Japan and Canada.

Our economy is 14 per cent larger than it was just five years ago.

This growth is being achieved by Kiwi entrepreneurs, Kiwi businesses, and Kiwi workers, all taking on the world and succeeding.

Under the Government's strong economic leadership, New Zealand is shaping globalisation to its advantage. We've embraced increased trade, new technologies, innovation, and investment.

We are becoming more confident both overseas and here at home.

When we hit tough times in dairy - our biggest export industry - we got on and diversified.

We've grown our tourism industry, education and business services.

We're selling more apples, wine, kiwifruit and other high-value foods.

And we're growing an increasingly impressive tech sector, with hundreds and hundreds of competitive Kiwi companies selling their amazing technologies all over the globe.

This is our future Mr Speaker. An innovative outward facing hi-tech country selling high value products and services to the world.

A strong and growing economy is important because of the job opportunities it provides for New Zealanders.

Well over 200,000 more jobs have been created over the last three years.

Our adult employment rate is now its highest ever with 67.1 per cent of everyone over the age of 15 employed. That's the third highest rate in the OECD.

The strength of our economy in recent years has started correcting some of the imbalances that have worried us for a very long time, notably our external accounts.

We have an unusually low Balance of Payments deficit for this stage of our economic cycle, and the amount we as a country owe the world has dropped from 82 per cent of GDP in 2008 to 60 per cent today. That's good progress.

We have, however, much more to do. We need to maintain and extend this growth if we are to decisively deal with the long-term imbalances of the past and provide the sustained prosperity that New Zealanders deserve.

The medium-term economic outlook is positive, led by rising export values, high levels of house building and commercial construction, and low interest rates.

Treasury forecasts annual economic growth to average over 3 per cent for the next five years, peaking at around 3.8 per cent in 2019.

The outlook is driven by the Government's strong economic plan, and confident New Zealand companies who are investing, innovating, exporting, and creating skilled jobs.

Employment is forecast to keep growing strongly and unemployment is expected to steadily decline.

Nominal GDP is now forecast to be a cumulative $23.9 billion higher over the next five years than was expected at the Half Year Update.

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