Gross Domestic Product (GDP) is
an all-inclusive measure of the overall consumption
and production of services and goods of New Zealand.
GDP is also used as one of the principal measures of
general economic well-being.
The expansion of the
economy, which is indicated by an increasing GDP,
calls to mind concerns regarding inflationary
Gross Domestic Product computes the entire market
value of services and goods which are New Zealand
produced within a certain time frame after
subtracting the cost of services and goods employed
in the production process.
GDP, therefore, does not include transitional services and
goods and takes into account only fresulting aggregates. It
is computed as: GDP = C + I + G + (EX - IM), where “C” is
private consumption, “I” is private investment, “G” is
government expenditure, “EX” is exports of goods and
services, and “IM” is imports of goods and services.
New Zealand's economy was traditionally built upon a
constricted range of main products, such as meat,
wool, and dairy products.
For example, from about
1920 up to the end of the 1930s, the quota for dairy
export was usually about thirty five percent of
total exports, and during some years made up
approximately forty five percent of all the exports
of New Zealand.
Because of the high demand for New Zealand’s main
products such as its famous New Zealand wool, there
was an industry boom in 1951 which led to the
country’s high living standards.
Unfortunately, commodity rates for these exports decreased,
and in 1973, New Zealand was usurped in its privileged
trading position with the UK, because the latter joined the
European Economic Community.
Because of this, in the period from the 1970s to the 1990s,
the relative purchasing power adjusted Gross Domestic
Product per capita of New Zealand decreased from
approximately a hundred and fifteen percent of the
Organization for Economic Cooperation and Development (OECD)
average to eighty percent.
The state of New Zealand has adopted major economic
restructuring since 1984, transferring from an
agrarian based economy relying on concessionary
British market contact for a more industrialized,
free market financial system that can compete
worldwide. This growth has boosted real incomes,
broadened and deepened the technological
capabilities of the industrial sector, and contained
Inflation in New Zealand is still among the lowest
in the world of industry. GDP per capita has been
going up in the same fashion as the large economies
of Western Europe since the depression in 1990, but
the discrepancies are still significant.
The country’s heavy reliance on trade makes its prospects of
growth vulnerable to economic performance in Europe, Asia,
and the United States.
The economy of New Zealand today is seen as successful.
Nevertheless, the overall positive outlook has some
challenges. The income levels of New Zealand, which had once
been the same as that of Western Europe before the
depression of the 1970s, have never really fully recovered.
The GDP per capita of the country is, for example, lower
than that of Spain and approximately sixty percent lower
than that of the United States.