IntroductionThe New Zealand’s economy can be described as a market economy that greatly relies on international commerce, mainly with the European Union, China, Japan, Australia and the United States. It is strongly focused on primary industries such as agriculture and tourism with few high-tech and manufacturing sectors. The country is viewed as the most business friendly nation due to the free market reforms undertaken in the previous decades to eradicate barriers to investment. The Ireland’s economy on the other hand has changed in recent times, focusing on high-tech and services industries and reliant on industry, trade and investment.
Ireland has a stronger, vibrant economy in relation to GDP per capita, trade balance and household savings compared to New Zealand. However, the present financial crisis is impacting the Irish monetary system relentlessly, compounding domestic monetary problems. Fundamental DifferencesUnlike New Zealand whose economy has few manufacturing and high-tech industries and focuses on primary products, Ireland is basically a modern, commerce dependent economy. Its Gross Domestic Product averaged six percent between 1995 and 2007, but the level of activities declined considerably in the year 2008 and Ireland’s economy entered into a slump or recession for the very first time in a period of ten years following the start of the global economic crisis and successive severe recession in the construction, building and property markets (Economics Department, 2007).
Some of the once important sectors including farming, fisheries and agriculture have been dwarfed by services and industry sectors. Although the export segment, flooded by foreign multinationals is a major element of the economy, building and construction recently accelerated development of the economy together with increasing business investment and consumer spending.
Pricing or property prices increased more quickly in Ireland than in New Zealand within the last ten years compared to any other industrialized economy. GDP also improved during growth years and overtook that of America in 2007. Trade BalanceTrade balance is the net exports of products and services for a specific country. IN incorporates all exchanges between a country and other countries in the world involving a transfer of ownership of goods and general merchandise as well as services. If exports of a particular country surpass its imports, it is said to have a positive trade balance or a trade surplus.
If imports surpass exports on the other hand, the country has a negative trade balance or a trade deficit. The volume of Irish exports increased drastically between 1995 and 2000 and surpassed European Union’s growth. The decline of the positive trade balance in the 2000s implied that the Irish imports were expanding due to improved demand for luxury services and items rather than from a fall in exports like in New Zealand economy. However, the current economic crisis and sluggish than anticipated development in the European Union area was predicted to negatively affect Irish exports.
The trade balance was projected to become positive in the year 2004 as a result of improved world and EU economy. In 2001, Ireland’s imports were $48.3 billion while exports totaled $85.3 billion resulting in a positive trade balance of $37 billion.