While the New Zealand All Blacks may look unbeatable, the New Zealand economy progresses slowly

By Kirk Cheesman

Greatly dependent on international trade, New Zealand's economy benefits from its proximity to the Australian and Asian economies. As the leading broker of credit insurance in the country, ICBA Australia and New Zealand maintain a continuous updated file on the New Zealand economy.

The economy in New Zealand remains fragile.

• Unemployment in New Zealand increased to 6.8% in August 2010.

• Goods and Service Tax (GST) in New Zealand will increase from 12.5% to 15% on 1 October, 2010.

• The Reserve Bank expects CPI inflation in New Zealand to peak at 5.4% due to the GST increase, hikes in accident compensation levies, the impact of the emissions trading scheme on energy prices and changes to how life insurance policies are taxed.

• New Zealand business confidence indicators fell for a third time and have now nearly halved since reaching a high in February 2010.

• While increasing the cash rate to 3%, New Zealand’s Reserve Bank Governor commented on the fragility of the country’s recovery.

ICBA Australia and New Zealand believe that both the New Zealand and global economies progress slowly. A number of factors above are not unique to New Zealand and reflect a continuing tight global economy.

(Kirk Cheesman is Managing Director of ICBA Australia and New Zealand, National Credit Insurance (Brokers) Pty Ltd.)