The Minister of Finance greeted yesterday’s GDP numbers with the claim that
“While growth has softened in this latest quarter, the continuing trend is [with] consistent ongoing growth ahead of most other developed countries.
In the case of total GDP, that is no doubt true. It is what happens when your country has had population growth of 2.1 per cent in the previous year.
But where do we sit in terms of growth in real GDP per capita?
The OECD doesn’t have data yet for all member countries, but here is how our GDP per capita growth compares, focusing on the December 2016 quarter over the December 2015 quarter, for the countries there are data for.
And here is the same data for the full year to December 2016 over the full year to December 2015.
Neither comparison is intrinsically better than the other. Between them, really the best one can say is that New Zealand has been no better than the median country over the last year or so. That’s nothing to write home about…….especially as our data suggest we’ve had negative productivity growth over the last year (whether one uses the point to point or annual average measure). That means all our pretty modest per capita GDP growth over the last year has resulted from throwing more labour and more capital at the economy, and (less than) none at all by using resources smarter and better.
But according to the Minister
“This week’s statistics on economic growth and our external accounts show the benefit of the Government’s sensible, consistent economic management,” Mr Joyce says.