As we’re moving into the busy season for most of our exporter customers over the summer and festive period, it is a great reminder to ensure you not only work in your business, but you’re also working on your business. For New Zealand and Australian exporters planning for 2024, it’s crucial to understand the global economic landscape and its potential impact on trade. Below we’ve put together an article that provides a simplified overview of the key trends and insights that have been pegged as having an impact on 2024 strategic planning.

Global Economic Context

1. Below-Trend Global Growth: The International Monetary Fund (IMF) predicts that global growth will continue to be below trend in 2024. Advanced economies are expected to grow by about 1.4%, with emerging markets and developing economies experiencing a slight decline in growth.
2. Declining Global Inflation: Global inflation is expected to decrease from 6.9% in 2023 to 5.8% in 2024. This decline is attributed to tighter monetary policies and lower international commodity prices.

New Zealand’s Trade Performance

1. Top Ranking in Sustainable Trade Index: New Zealand has been ranked first in the Hinrich Foundation-IMD Sustainable Trade Index for the second consecutive year, highlighting its ability to trade in a sustainable manner.
2. Digital Economy and E-commerce Focus: The establishment of the Pacific Regional E-commerce Alliance, focusing on digital economy development, indicates a growing emphasis on e-commerce and digital trade in the Pacific region, which could be a key area for New Zealand exporters to explore.

Regional Developments

1. Australia’s Investment in Innovation and Minerals: Australia’s significant investments in the innovation sector and critical minerals, including a substantial investment by Microsoft, suggest opportunities for New Zealand exporters in these emerging sectors. Technology and innovation is a fast-growing sector in New Zealand.
2. China-Australia Relations: The Australian Prime Minister’s visit to China and discussions on economic cooperation hint at potential changes in trade dynamics in the Asia-Pacific region, which could impact New Zealand’s trade strategy. For example, New Zealand companies could look to partner with Australian firms to gain easier access to the Chinese market, leveraging Australia’s potential improved trade terms.
3. Strong Economic Growth in the United States: The U.S. economy’s robust growth, driven by consumer spending and exports, could offer export opportunities for New Zealand businesses, especially in sectors where the U.S. shows high demand. Examples here include Agricultural Products and Foodstuffs, Seafood, Specialty Beverages and Health and Wellness Products, with a particular focus on sustainable and eco-friendly products as outlined in FSMA 204 requirements by the FDA.
4. Economic Shifts in Europe: Germany’s rise to become the world’s third-largest economy may open new avenues for New Zealand exporters, especially given Germany’s strong economic position in Europe.

Key Takeaways for New Zealand Exporters

• Diversify Markets: Given the global economic shifts, diversifying into emerging markets and sectors, such as digital economy and critical minerals, may be beneficial.
• Focus on Sustainable Practices: New Zealand’s leading position in sustainable trade should be leveraged to gain a competitive edge.
• Monitor Global Economic Trends: Keeping a close eye on economic developments in key regions like the Asia-Pacific, Europe, and the United States will be crucial for adapting export strategies accordingly.

Conclusion

As New Zealand exporters look towards 2024, understanding these global trends and regional developments will be key to navigating the changing trade landscape. Emphasising sustainable trade practices, exploring new sectors, and staying informed about global economic shifts are essential strategies for success in the coming year.

Source: New Zealand Ministry of Foreign Affairs and Trade