A common view which has been expressed by many analysts over recent weeks is that any policies which continue to produce budgetary surpluses will be acceptable to international investors. The main reason for this belief is that all of the likely governing parties appear intent on balancing the Government books and not borrowing money to support social programmes which the country cannot afford to maintain. As with personal saving plans, reducing debt is the first step to building for retirement. With the average age of New Zealanders increasing it will soon be critical that New Zealand has a substantial capital account surplus and not just an annual current account surplus. Without a capital account surplus, New Zealanders will simply be leaving a continued legacy of debt for future generations.
Japan Japan is the largest export market for New Zealand's horticultural products.
The relatively low value of the Japanese yen has therefore caused considerable difficulties to New Zealand's horticultural producers. The Japanese economy has been very slow to recover from the 1992 recession and their economic growth has remained one of the lowest in the Asian areas for most of this period. At the same time New Zealand's economy has begun to recovery which has resulted in an increased value for our dollar. The resulting comparative economic strengths have ended New Zealand exporters' price advantage. The current comparative strength of New Zealand's dollar to the Japanese yen is set to continue for maybe as long as the next two to three years.