Tourism / Transport
New Zealand has a high-income economy with a nominal gross domestic product (GDP) per capita of US$36,254. The currency is the New Zealand dollar, informally known as the "Kiwi dollar"; it also circulates in the Cook Islands (see Cook Islands dollar), Niue, Tokelau, and the Pitcairn Islands. New Zealand was ranked 13th in the 2016 Human Development Index and third in the 2016 Index of Economic Freedom.
Historically, extractive industries have contributed strongly to New Zealand's economy, focussing at different times on sealing, whaling, flax, gold, kauri gum, and native timber. With the development of refrigerated shipping in the 1880s meat and dairy products were exported to Britain, a trade which provided the basis for strong economic growth in New Zealand. High demand for agricultural products from the United Kingdom and the United States helped New Zealanders achieve higher living standards than both Australia and Western Europe in the 1950s and 1960s. In 1973, New Zealand's export market was reduced when the United Kingdom joined the European Community and other compounding factors, such as the 1973 oil and 1979 energy crisis, led to a severe economic depression. Living standards in New Zealand fell behind those of Australia and Western Europe, and by 1982 New Zealand had the lowest per-capita income of all the developed nations surveyed by the World Bank. In the mid-1980s New Zealand deregulated its agricultural sector by phasing out subsidies over a three-year period. Since 1984, successive governments engaged in major macroeconomic restructuring (known first as Rogernomics and then Ruthanasia), rapidly transforming New Zealand from a protected and highly regulated economy to a liberalised free trade economy.
Unemployment peaked above 10% in 1991 and 1992, following the 1987 share market crash, but eventually fell to a record low (since 1986) of 3.7% in 2007 (ranking third from twenty-seven comparable OECD nations). However, the global financial crisis that followed had a major impact on New Zealand, with the GDP shrinking for five consecutive quarters, the longest recession in over thirty years, and unemployment rising back to 7% in late 2009. Unemployment rates for different age groups follow similar trends, but are consistently higher among youth. In the December 2014 quarter, the general unemployment rate was around 5.8%, while the unemployment rate for youth aged 15 to 21 was 15.6%. New Zealand has experienced a series of "brain drains" since the 1970s that still continue today. Nearly one quarter of highly skilled workers live overseas, mostly in Australia and Britain, which is the largest proportion from any developed nation. In recent years, however, a "brain gain" has brought in educated professionals from Europe and less developed countries.
New Zealand is heavily dependent on international trade, particularly in agricultural products. Exports account for 24% of its output, making New Zealand vulnerable to international commodity prices and global economic slowdowns. Food products made up 55% of the value of all the country's exports in 2014; wood was the second largest earner (7%). Its major export partners are Australia, United States, Japan, China, and the United Kingdom. On 7 April 2008, New Zealand and China signed the New Zealand–China Free Trade Agreement, the first such agreement China has signed with a developed country. The service sector is the largest sector in the economy, followed by manufacturing and construction and then farming and raw material extraction. Tourism plays a significant role in the economy, contributing $12.9 billion (or 5.6%) to New Zealand's total GDP and supporting 7.5% of the total workforce in 2016. International visitor arrivals are expected to increase at a rate of 5.4% annually up to 2022.
Wool was New Zealand's major agricultural export during the late 19th century. Even as late as the 1960s it made up over a third of all export revenues, but since then its price has steadily dropped relative to other commodities and wool is no longer profitable for many farmers. In contrast dairy farming increased, with the number of dairy cows doubling between 1990 and 2007, to become New Zealand's largest export earner. In the year to June 2009, dairy products accounted for 21% ($9.1 billion) of total merchandise exports, and the country's largest company, Fonterra, controls almost one-third of the international dairy trade. Other agricultural exports in 2009 were meat 13.2%, wool 6.3%, fruit 3.5% and fishing 3.3%. New Zealand's wine industry has followed a similar trend to dairy, the number of vineyards doubling over the same period, overtaking wool exports for the first time in 2007.
In 2015, renewable energy, primarily geothermal and hydroelectric power, generated 40.1% of New Zealand's gross energy supply. Geothermal power alone accounted for 22% of New Zealand's energy in 2015.
The provision of water supply and sanitation is generally of good quality. Regional authorities provide water abstraction, treatment and distribution infrastructure to most developed areas.
New Zealand's transport network comprises 94,000 kilometres (58,410 mi) of roads, including 199 kilometres (124 mi) of motorways, and 4,128 kilometres (2,565 mi) of railway lines. Most major cities and towns are linked by bus services, although the private car is the predominant mode of transport. The railways were privatised in 1993, but were re-nationalised by the government in stages between 2004 and 2008. The state-owned enterprise KiwiRail now operates the railways, with the exception of commuter services in Auckland and Wellington which are operated by Transdev and Metlink, respectively. Railways run the length of the country, although most lines now carry freight rather than passengers. Most international visitors arrive via air and New Zealand has six international airports, but currently only the Auckland and Christchurch airports connect directly with countries other than Australia or Fiji.
The New Zealand Post Office had a monopoly over telecommunications until 1987 when Telecom New Zealand was formed, initially as a state-owned enterprise and then privatised in 1990. Chorus, which was split from Telecom (now Spark) in 2011, still owns the majority of the telecommunications infrastructure, but competition from other providers has increased. As of 2016, the United Nations International Telecommunication Union ranks New Zealand 13th in the development of information and communications infrastructure.