New Zealand, referred to as Aotearoa, means “Land of the Long White Cloud” in Maori, one among the main languages within the country. New Zealand’s economy is relatively small. Its GDP, which is valued at 203 billion USD in 2018, ranks 51st among the planet economies.
Trade is a vital trait for economic activity. It is an export-driven economy, with its main exports like ores, metals, and wool comprising a 3rd of its GDP. It also exports much of its cattle and dairy products. Its primary industries are agriculture and tourism, and that they only have small manufacturing and technology sectors. Because of that, its imports from other countries comprise mostly of heavy machinery, equipment, vehicles, and electronic products.
Since the country has removed many barriers to foreign investment, the planet Bank has praised New Zealand for being one among the foremost business-friendly countries within the world.
The Federal Reserve Bank of New Zealand (RBNZ) is responsible of the monetary policy of the state. The RBNZ is tasked with maintaining price stability, setting interest rates, and monitoring output and exchange rates. The New Zealand dollar is nicknamed Kiwi.
Since New Zealand’s economy is usually hooked in to its exports of commodities and agricultural products, the general economic performance of the region is linked to commodity prices.
- If commodity prices rise, then the quantity of cash purchased New Zealand’s exports also rises, which then makes a bigger contribution to the country’s GDP. Since a better GDP reflects a robust economic performance, it could lead on to an appreciation of the Kiwi.
- Conversely, falling commodity prices result to lower price of exports, making a smaller contribution to GDP. A lower GDP could then cause the Kiwi to depreciate.