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New Zealand

Strong Exporting Industry

Strong Exporting Industry in New Zealand

Though not as rich in resources as its neighbor, New Zealand does have a strong export industry. Things like dairy products, agricultural crops, timber, and some mined metals all contribute about 4.3% to GDP, with agricultural commodities making up about 24% of that figure.

The country’s tourism industry is growing at about 4% a year. This has created a robust services industry and attracted new “settlers” or educated professionals, from surrounding island nations and Europe.

New Zealand also has NZ$19.3 billion (US$12.3 billion) in Forex reserve assets.

Two things will help keep the country’s currency relatively strong. A decrease in energy prices and the drop in exchange rates when the U.S. dollar climbed so swiftly in 2008 has created a favorable export situation, and now that the U.S. dollar is showing its weak side, the Kiwi dollar is experiencing a rebound.

At the end of 2008, New Zealand’s interest rate stood at 5%. That’s after a 150-basis point cut in October.

A giant cut, but New Zealand still has room to cut. Most analysts expect to see a rate between 3.5% and 4% by the middle of 2009.

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