Party ain't over for NZ's 'rock star' economy

The economist who coined the phrase "rock star economy" says New Zealand is still churning out the hits.

In 2014, HSBC chief economist Paul Bloxham bestowed the honour on Aotearoa's economy for its fast growth, at least by Western standards.

"The point of that reference was the New Zealand economy had been outperforming most of the developed world, and that still stands," he told The AM Show on Monday.

"I think New Zealand is doing very well when you compare it to the rest of the developed world. So yes, I think it has continued to be a rock star."

Australia's done pretty well too, he says, but New Zealand's achieved what few others have in the post-global financial crisis world; getting the Government books back in black.

After several successive surpluses under the previous Labour Government, then-Finance Minister Bill English posted six deficits in a row as the global economy struggled to recover from the 2008 crash.

Mr Bloxham says Australia and New Zealand's success comes from keeping unemployment in check.

"The labour markets have remained quite tight, the global financial crisis didn't have that much impact on those economies. We've got labour markets that are getting very close to being at full employment, which they haven't got in Europe."

Even now, nine years later, unemployment rates remain in double-digits across much of Europe. In Spain it's 21.4 percent, in Greece it's 21.7 and in France 10.6.

In New Zealand it rose from 3.4 percent in 2008 to 6.7 percent in 2012, and has since gradually come down to 4.8 percent.

Even though wage growth has not kept up with productivity since the neoliberal economic reforms that swept much of the world in the 1980s, Mr Bloxham says Kiwis are better off than most of the world in that chances are, they at least have a job - and low wages can't really be blamed too much on the present Government.

"Weak wages growth is a global story - it's not just a local phenomenon. It's partly due to technology, it's partly due to increased casualisation of the workforce, it's partly due to reduced unionisation."

Newshub.

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