Tuesday, 3 June 2014

Best terms of trade since 1973

From Statistics New Zealand
New Zealand's terms of trade - a measure of the purchasing power of New Zealand’s exports abroad - is the best it has been since 1973.

This is significant because, as most students of history will tell you, 1973 was the year New Zealand lost access to the United Kingdom, a market upon which our entire economic prosperity had depended on.

Strong performances by the diary and meat export sectors has helped push our terms of trade up by 1.8%. An increase in our terms of trade means New Zealand can buy more imports for the same amount of exports.

Meanwhile, the prices we pay for imported goods also fell. Interestingly, the volume of imports actually increased, meaning we imported more but paid less for it.

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