2015 Index of Economic Freedom

New Zealand

overall score82.1
world rank3
Rule of Law

Property Rights95.0

Freedom From Corruption91.0

Limited Government

Government Spending43.0

Fiscal Freedom70.4

Regulatory Efficiency

Business Freedom95.5

Labor Freedom91.4

Monetary Freedom87.6

Open Markets

Trade Freedom86.8

Investment Freedom80.0

Financial Freedom80.0

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Quick Facts
  • Population:
    • 4.5 million
  • GDP (PPP):
    • $136.6 billion
    • 2.4% growth
    • 1.5% 5-year compound annual growth
    • $30,493 per capita
  • Unemployment:
    • 6.4%
  • Inflation (CPI):
    • 1.1%
  • FDI Inflow:
    • $986.5 million
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New Zealand’s economic freedom score is 82.1, making its economy the 3rd freest in the 2015 Index. Its score is up by 0.9 point, with improvements in the management of government spending, monetary freedom, and labor freedom outweighing declines in freedom from corruption, fiscal freedom, and business freedom. New Zealand is ranked 3rd out of 42 countries in the Asia–Pacific region and 3rd in the world.

New Zealand’s economic development over the past few decades has been built on principles of market openness and free trade. Reforms in the 1980s opened the economy to imports, reduced the size of government, and lowered the tax burden. These changes, enhanced in recent decades, have solidified the economy’s ranking among the world’s freest, with a high standard of living and low rates of poverty.

New Zealand’s prosperity rests on its well-established rule of law. The economy is the least corrupt in the world, and property rights, including intellectual property, are strongly protected. Entrepreneurs generally find regulations efficient, and the labor market is efficient in allocating labor. Despite having one of the world’s most open financial sectors, New Zealand banks avoided the worst effects of the global financial crisis.



New Zealand is a parliamentary democracy and one of the Asia–Pacific region’s most prosperous countries. After 10 years of Labor Party–dominated governments, the center-right National Party, led by Prime Minister John Key, returned to power in November 2008 and was re-elected in November 2011. Far-reaching deregulation and privatization in the 1980s and 1990s largely liberated the economy, which is powered mainly by agriculture but also benefits from a flourishing manufacturing sector, thriving tourism, and a strong renewable geothermal energy resource base. Following a sizable contraction during the global economic recession, the economy has been expanding since 2010.

Rule of LawView Methodology

Property Rights 95.0 Create a Graph using this measurement

Freedom From Corruption 91.0 Create a Graph using this measurement

New Zealand is tied with Denmark for first place out of 177 countries in Transparency International’s 2013 Corruption Perceptions Index. It is renowned for its efforts to penalize bribery and ensure a transparent, competitive, and corruption-free government procurement system. The judicial system is independent and functions well. Private property rights are strongly protected, and contracts are notably secure.

Limited GovernmentView Methodology

The top individual income tax rate is 33 percent, and the top corporate tax rate is 28 percent. Other taxes include a goods and services tax and environmental taxes. Overall tax revenue equals 32.9 percent of gross domestic product. Public expenditures equal 43.6 percent of GDP, and public debt is equivalent to approximately 35 percent of annual economic activity.

Regulatory EfficiencyView Methodology

The entrepreneurial framework is transparent and efficient. Starting a business takes one procedure and one day on average. The labor market is flexible, with moderate non-salary costs and flexible work-hours regulations. New Zealand has the lowest subsidies of any OECD country. It removed all farm subsidies two decades ago and spurred the development of a diversified agriculture sector.

Open MarketsView Methodology

New Zealand’s average tariff rate is 1.6 percent. Non-tariff barriers are low as a result of unilateral trade liberalization and participation in trade agreements. Foreign investment is welcomed, but the government may screen some large investments. The open financial sector is highly competitive and well developed. Prudent regulations allowed firms to withstand the global financial turmoil with little disruption.

Country's Score Over Time

Bar Graph of New Zealand Economic Freedom Scores Over a Time Period

Country Comparisons

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Regional Ranking

rank country overall change
1Hong Kong89.6-0.5
3New Zealand82.10.9
7South Korea71.50.3
8Malaysia 70.81.2
10Brunei Darussalam68.9-0.1
12Thailand 62.4-0.9
15Kyrgyz Republic 61.30.2
21Sri Lanka58.6-1.4
25Pakistan 55.60.4
27Bangladesh 53.9-0.2
29Papua New Guinea53.1-0.8
36Solomon Islands470.8
42North Korea1.30.3
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