There was some good news for the New Zealand economy in the latest figures from Statistics New Zealand (www.stats.govt.nz). For the first time for many years, we earned more money from our exports and paid less for imports. The surplus money was $858 million. Imports were down more than 20%, especially imports of cars and petrol. 80% of the increase in exports went to China. NZ now has a free trade agreement with China. After the problem with baby milk powder in China (see January 25th 2009), Chinese people prefer to buy New Zealand milk powder. They also want New Zealand butter and cheese. China also bought our logs and wood. Although New Zealand farmers are not getting a good price for dairy products at the moment, that could improve in the future. NZ exports a lot of food, especially meat and dairy products, but also fruit like apples and kiwifruit, all around the world.

The bad news is that GDP is down 1% for the year. GDP means Gross Domestic Product and measures economic activity. Building work was down 8.9% and manufacturing dropped 5.4% since last year. Household spending was down 1.4%, especially for cars, furniture and appliances like washing machines. The decrease in GDP is the first for seven years.