Productivity growth will be the main driver of global economic growth and prosperity over the coming decades. For New Zealand, this represents both a challenge and an opportunity, as NZ productivity is below that of leading OECD countries.
New Zealand has experienced robust economic growth since 2012, buoyed by record levels of inward migration and strong terms of trade. Employment has expanded vigorously, reversing much of the increase in unemployment since the onset of the global financial crisis.
The New Zealand economy continues enjoying a strong, broad-based expansion, driven by booming tourism, high net inward migration, solid construction activity and supportive monetary policy.
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This country note from Going for Growth 2017 for New Zealand identifies and assesses progress made on key reforms to boost long-term growth, improve competitiveness and productivity and create jobs.
Ensuring that permanent spending or tax cuts are implemented in a sustainable manner would encourage the strong fiscal position that New Zealand needs to meet potentially large macroeconomic shocks and long-run ageing-related costs.
The New Zealand economy has performed well in recent years, but bottlenecks in housing and urban infrastructure, inequalities in living standards and rising environmental pressures all pose challenges for sustaining robust growth and high levels of well-being over the long term, according to the OECD’s latest Economic Survey of New Zealand.
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This country note from Going for Growth 2015 for New Zealand identifies and assesses progress made on key reforms to boost long-term growth, improve competitiveness and productivity and create jobs.
The per capita income of New Zealand remains low compared to other advanced OECD countries, mostly owing to a substantial productivity gap vis-à-vis top performers.
The NZ labour market is among the most flexible in the OECD, and outcomes for its young people have been among the best. However, labour-market opportunities are heavily determined by initial education, where New Zealand’s system is also successful and innovative in many ways.
As its workforce ages and major economies shift towards producing higher value-added goods and services, New Zealand will face increasing challenges to remain globally competitive and maintain high living standards. Future growth will need to come increasingly from productivity gains, and resources will have to shift towards activities that rely more on skills, technology and intangible assets.