New Zealand's Economy Outgrowing Other Countries Including Australia, Canada, U.S.

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By Reissa Su | December 20, 2013 6:34 PM EST

New Zealand's economic growth is faster than most countries including Australia. According to Finance Minister Bill English, the latest statistics revealed that gross domestic product (GDP) growth of New Zealand was 3.5 per cent in Sept compared to 2.3 per cent of Australia's GDP.

Economic growth in the United States in the same period was 1.8 per cent, Britain with 1.5 per cent, Canada with 1.9 per cent and Japan with 2.4 per cent.

Mr English said New Zealand is one of the countries with the fastest growing developed economies in the world despite experiencing the worst drought in decades earlier in 2013. The finance minister also said ANZ Bank has confirmed that business confidence in New Zealand is up in its highest level since 1999 with the most confidence in the manufacturing industry.

New Zealand's dairy sector has recovered from the drought to allow a faster than expected economic growth in the third quarter. The country's forestry, fishing and agriculture grew by 14 per cent also in the same quarter.

After the local statistics were released, the New Zealand dollar traded high against the U.S. dollar at 82.40 U.S. cents from 82.21 U.S. cents. The Kiwi dollar rose to a new 5-year high against the Australian dollar at 93.04 Australian cents.

Economic growth forecasts

The economy of New Zealand is expected to grow even stronger in the next two years, according to the Institute of Economic Research. A survey of economic forecasts based from various economic and financial agencies said that New Zealand is expected to have a broad-based annual growth rate of 2.8 per cent by March 2014 and 3 per cent in the 2014.

Institute of Economic Research economist Shamubeel Eagub said the degree of uncertainty in New Zealand's economic outlook has been greatly reduced.  Due to the reduced uncertainty, most of the economic forecasts point to towards a stronger New Zealand economy in 2014 and 2015. However, Mr Eaqub said the inflation rate will grow as the economy does since most businesses in the country will need to raise prices. Economists have also reached a consensus that interest rates will rise from early 2014 to ease some of the economic pressures.

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