New Zealand is expected to enjoy the strongest growth among the fastest-growing advanced economies in 2013 and 2013 based on the annual World Economic Outlook of the International Monetary Fund (IMF). With business confidence at a 14-year high, New Zealand may be on its way to economic recovery with high projections from IMF.
The IMF has forecast the economic growth rate of New Zealand in 2013 at 2.5 per cent. Among the 35 advanced economies listed by the IMF, only Israel, Singapore, Hong Kong and Korea were tipped to have a stronger growth rate than New Zealand. According to the World Economic Outlook report, the average growth for advanced economies was pegged at 2 per cent in 2013.
The growth rate is expected to reach 2.9 per cent in 2014 based on IMF estimates. The figure is also expected to be exceeded by New Zealand, Singapore, Hong Kong, Korea and Taiwan which will raise the average growth for advanced economies to 2 per cent.
In terms of fiscal policies, the IMF has noted that New Zealand looked relatively good with a government deficit of 0.4 per cent of gross domestic product (GDP) over 2014. The average government deficit for advanced economies is 3.5 per cent.
IMF's World Economic Outlook also expected New Zealand to have an unemployment rate of 5.3 per cent in 2014 which was not as alarming as the 12.2 per cent projected in European nations. The United States is expected to have a 7.4 per cent unemployment rate while Australia's unemployment rate is projected at 6 per cent.
According to the IMF, the global economy has been "stuck" in a slowdown with an annual growth paced at 2.5 per cent in the first 6 months of 2013. It was relatively the same as the second half of 2012.
The IMF expected the global growth rate to pick up and reach 2.9 per cent in 2013 and 3.6 per cent in 2014. World trade volumes are also projected to rise to 4.9 per cent in 2014 from 2.9 per cent in 2013.
Emerging economies will continue to account for the bulk of the overall world growth despite their economic slowdown.
The IMF forecast China's growth rate to slow down at 7.3 per cent in 2014, down from 7.3 per cent in 2013. The report assumed that Chinese authorities will not implement a major stimulus and let the slowdown continue to make the transition to a more sustainable economy.