Year 2014: A Golden Year for New Zealand's Economy

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By Reissa Su | December 30, 2013 3:09 PM EST

New Zealand's economy will prosper in 2014 as financial experts predict it will be a "golden" year for the country. All signs point to a stronger economy in 2014.

With New Zealand's booming commodity prices, business confidence is at its highest in 20 years. New Zealand is tagged as the one of the world's fastest growing economies, beating Australia and the United States.

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.

Employment opportunities and wages are also expected to rise along with consumer spending. Compared with Australia, once New Zealand's biggest trading partner but was overtaken by China, New Zealand is predicted to move towards a more positive outlook.

NZIER principal economist Shamubeel Eaqub declared that the country will have a "generally very positive" 2014, with the economy more likely to have the strongest growth since 2007.

ASB bank chief economist Nick Truffley remarked New Zealand will experience "for quite some time" one of the country's best years. However, the economic boost will not mean the average Kiwi will get to experience the same boom.

Since employment growth will increase, competition for staff will also intensify. This will push wages up slightly by 3 per cent, according to economists. New Zealand households will collectively have a "slightly better" income.

The wage growth will be mostly felt in the construction industry especially Auckland and Christchurch where rebuilding is currently being done. New Zealand's improving economy has attracted more immigrants which means more people spending money in the country.

Despite the positive outlook, the government and economists warn Kiwis not to be overconfident. Homeowners in Auckland are advised to manage repayments amid rising interest rates and the possibility of declining house prices. 

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