GDP increase 2.3 per cent

Press, 6 July 1988, Page 35

GDP increase 2.3 per cent

PA Wellington New Zealand’s gross domestic product (GDP) in 1986/87 (GDP) is estimated to have risen by 2.3 per cent, after adjusting for price changes, the Department of Statistics said yesterday. GDP, the total value of all goods and services produced in the domestic economy, was estimated to have reached $53,382 million in the year ended March 31, 1987.

The 2.3 per cent rise in 1986/87 followed a 2.1 per cent rise in the 1985/86 year. Total indirect tax rose by 42.6 per cent, largely due to the introduction of GST on October 1, 1986. The estimated amount of GST included in the indirect tax total was larger than the amount of GST actually collected by the Government during the 1986/87, being about SI7OOM compared with SI2OOM, the department said.

The rise in total indirect taxes due to GST was partly offset by a cut in sales tax collected. The external transactions account shows that for the first time since 1978/79 the value of exports of goods and services was higher than the value of imports of goods and services. That was because exports rose by 7.2 per cent, while imports fell marginally by 0.3 per cent, resulting in a small trade surplus of S3M, compared with a deficit of $1,056 billion in 1985/86.

However, payments to the rest of the world on invisible items -such as interest, dividends and other transfers, exceeded receipts on invisible items, the department said.

The total effect of these overseas transactions was a significant fall in the deficit on the current account, from $2.9168 in 1985/86 to $1.9738.