New Zealand - Recent developments and prospects (Vol. 1 of 2) : Main report

RESTRICTED Report No. EAP-ZOA This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION RECENT DEVELOPMENTS AND PROSPECTS OF THE NEW ZEALAND ECONOMY (in two volumes) VOLUME I MAIN REPORT February 10, 1971 East Asia and Pacific Department  CURRENCY EQUIVALENTS NZ$l US$1.12 US$1 NZ$0.893 NZ$1,000,000 US$1,120,000 us$i,ooo0,0oo NZ$892,000 New Zealand Fiscal Year: April 1 - March 31  This report was prepared by an Economic Mission which visited New Zealand in October 1970. Its members wiere Messrs. Guenter H. Reif (Chief), J. Richard Bumgarner and George Maniatis. Mr. Parvez Hasan was with the Mission for part of the time.  TABLE OF CONTENTS VOLUME I MAIN REPORT Page No. BASIC DATA MAP OF NEW ZEALAND SUMMARY AND CONCLUSIONS i- v I. RECENT TRENDS 1 1., Growth 1 2. External Trade and RLnance 3 3. Domestic Finance 8 II. THE PRODUCTION SECTORS 18 1. Agriculture, 19 2. Forestry 22 3. Mining 23 4e Fuel and Power 24 5. Manufacturing 25 III. PROSPECTS AND PROBLEMS 28 1. Basic Long-Term Problems and Policies 28 2. Import liberalization 34 3. Manpower and Migration 36  1/ BASIC DATA Area (two main islands only) 102,000 square miles Population (March, 1970) 2,821,000 Estimated annual growth rate 1960/70 1.8% Gross National Product (FY 1969/70) N.Z.$4,757 million Per Capita GNP U.S.$1,890 Annual real growth rate: FY 1959/60-FY 1969/70 4.0% Percentage of GNP at Current Prices FY 1962/63-FY 1967/68 1969/70 Private Consumption 62% 60% Public Consumption 14% 15% Gross Investment 2/ 25% 23.6% Gross Domestic Savings 24% 24% Exports of Goods and Se'rvices 21% 27% Imports of Goods and Seirvices 19% 24% Government Taxation Revenue 3/ 26% 28% Resource Gap (percent GNP) FY 1964/65 FY 1969/70 -.85 .4 Money and Credit Dec. 1969 Change over (NZ$ million) Dec. 1968 Total Money Supply 801.8 2.6% Total Domestic Credit 961.2 10.3% Price Increases 4I 1964-69 Sept. 1969/ Sept. 1970 4.4% p.a. 6.0% Government Finance (NZ$ million) FY FY FY 1967/68 1968/69 1969/70 Consolidated Public Sector: Current Expenditure 591 649 722 Transfer Payments 417 441 478 Capital Expenditure 376 382 416 Total Expenditure 1,-C; 1,472 1,iC Revenues from Direct Taxes 768 791 888 Revenues from Indirect Taxes 317 343 376 Public Authority Trading Income 163 188 207 Total Revenue 1,27 1,322 1,471 Deficit Financed by Net Borrowing 136 150 145 Public Savings (240) (232) (271) 1/ New Zealand Fiscal Year, April 1 - March 31. 2/ Includes changes in stocks. 3/ Central Government only. i~/ Consumer Price Index, calendar years.  Average AIUunual External. Trade Change (%) (Trading years July 1-June 30) Fi