Weekly Global Report:
Trade and Economic Updates
Domestic
Government announces changes to the Overseas Investment Act
This week, the Government announced plans to reform the Overseas Investment Act, with Associate Minister of Finance David Seymour commenting the changes will “speed up decisions and provide more confidence to investors”, while protecting New Zealand’s national interests.
Key elements of the package include:
- better acknowledging the benefits investment can provide to New Zealand’s economy,
- for all investments aside from residential land, farmland and fishing quota, making decisions in just 15 days, unless the application could be contrary to New Zealand’s national interest,
- strengthening the Government’s ability to intervene on the rare occasion that a transaction is not in the national interest,
- giving LINZ more powers to grant consent without involving Ministers.
Americas
US relaunches investigations into countries that introduce digital service taxes
Last week, President Trump issued an Executive Order directing agencies to relaunch digital service taxes investigations(external link) that were initiated during his first term. President Trump has indicated tariffs may be applied on countries "to combat the digital service taxes(external link) (DSTs), fines, practices, and policies that foreign governments levy on American companies." Several countries have already introduced DSTs, levying taxes on sales revenue by these and other digital services providers within their borders.
Australia
Australia’s central bank cuts rates for the first time in four years
Last week, the Reserve Bank of Australia (RBA) lowered the cash rate by 0.25%(external link), the first cut since November 2020. The RBA noted that inflation had fallen substantially since its peak of 7.8% in 2022 and was now sitting at 2.4%. However, it said it “remains cautious” about the prospect of further reductions, pointing to significant “geopolitical and policy uncertainties” and a tight labour market (with unemployment rates remaining around historic lows(external link)).
South and South East Asia
UK-India re-launch talks on a free trade agreement
This week, UK Trade Secretary Jonathan Reynolds travelled to India to meet with his counterpart, Indian Minister for Commerce Piyush Goyal, to relaunch talks on a UK-India trade deal(external link). The visit will include two-days of focused discussions; with negotiating teams meeting for the first under the new UK government (however, this will be the 15th round of negotiations(external link)). The UK and India are currently the sixth and fifth largest global economies, and their trade relationship is worth over NZ$90.35 billion. UK Investment Minister Poppy Gustaffsson will also visit New Delhi and Bengaluru this week seeking to attract further Indian investment into the UK. India is a major and growing source of FDI into the UK.
Europe
Eurozone growth stagnates
Last week, the European Central Bank announced that Eurozone economic growth stagnated(external link) in the fourth quarter of 2024. Annual GDP growth remains unchanged(external link) at 0.9%. This is the first time the economy has not grown since the fourth quarter of 2023. GDP growth across Europe is currently varied, with GDP contracting in France and Germany in the fourth quarter of 2024, while Spain’s GDP grew by 0.8%. The EU is focused on supporting economic growth, with the European Commission recently launching its “Competitiveness Compass(external link)” which proposes a new approach to competitiveness that combines industrial policies, investment and reforms, particularly focused on innovation, decarbonization and security.
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External links
The following links may provide useful information to businesses:
NZTE’s website(external link) and their myNZTE(external link) provides a range of insights and tools available to support New Zealand exporters.
The Treasury releases a weekly economic update(external link) every Friday. Stats NZ has published a data portal(external link) with near real-time economic indicators.
MBIE publishes a sector reports series(external link) which provides regularly updated reports on all industry sectors that make up the New Zealand economy. These include official economic data and the challenges and opportunities that face New Zealand’s industry sectors.
Business.govt.nz(external link) provides tools and advice from across government to save small businesses’ time and help make the business a success.
MFAT has created a tariff finder(external link) which is designed to help goods exporters and importers maximise benefits from New Zealand’s Free Trade Agreements and compare tariffs in 136 other markets.
The all of government Trade Barriers(external link) website can be used to register any trade barriers experienced or issues exporting to an offshore market. Queries can be sent via the website or through the MFAT Exporter Helpline 0800 824 605. Enquiries will be sent to the government agency best placed to answer.
Tatauranga Aotearoa Stats NZ provides official data on the value of New Zealand’s exports and imports of both goods and services, by commodity type via the New Zealand Trade Dashboard(external link). This interactive dashboard is updated every quarter and allows for filtering by country and by commodity type.
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This information released in this report aligns with the provisions of the Official Information Act 1982. The opinions and analysis expressed in this report are the author’s own and do not necessarily reflect the views or official policy position of the New Zealand Government. The Ministry of Foreign Affairs and Trade and the New Zealand Government take no responsibility for the accuracy of this report.
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