World Economy

NZ Needs to Diversify

NZ Needs to DiversifyNZ Needs to Diversify

New Zealand’s economy needs to diversify. In 2013, 44% of the goods exports were animal and animal products – the majority from the dairy sector. The country is hugely reliant on primary products, Yahoo reported. But the country simply does not produce enough of them (despite major unsustainable dairy intensification) to pay for what they import, so New Zealand consistently runs a substantial current account deficit. In other words, New Zealanders spend more than what they save, which means they rely on financial inflows to cover the gap. Current account deficits aren’t always bad, but they can quickly become unsustainable, leading to painful adjustments.