Daily Archives: January 4, 2023

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New Zealands economic freedom score is 80.6, making its economy the 4th freest in the 2022 Index. New Zealand is ranked 2nd among 39 countries in the AsiaPacific region, and its overall score is above the regional and world averages.

New Zealands economy was growing smartly in 2017 and 2018 but began to slow in 2019 before contracting in 2020. Growth recovered in 2021. During the past five years, economic freedom has generally been robust, although it has dipped. With higher scores for government integrity and judicial effectiveness overshadowed by score decreases in fiscal health and business freedom, New Zealand has registered an overall 3.1-point loss of economic freedom since 2017 but nevertheless remains in the top, Free Index category. The countrys indicators are generally very strong except for the burden of government spending on the economy.

IMPACT OF COVID-19: As of December 1, 2021, 44 deaths had been attributed to the pandemic in New Zealand, and the governments response to the crisis ranked 7th among the countries included in this Index in terms of its stringency. The economy contracted by 3.0 percent in 2020.

The former British colony of New Zealand is one of the AsiaPacific regions most prosperous countries. General elections in 2017 resulted in a hung parliament, enabling new Prime Minister Jacinda Arderns center-left Labor Party to return to power. She will remain in power until 2023 after winning a landslide victory in 2020 elections. Far-reaching deregulation and privatization since the 1980s have largely liberated the economy. Agriculture is important as are manufacturing, tourism, and a strong geothermal energy resource base. The ongoing trade tension between the U.S. and China is of concern to New Zealand, especially given its heavy reliance on China for export revenue. Until the present crisis, New Zealands economy had been expanding since 2010.

New Zealand recognizes and enforces secured interests in property, both movable and real. The Land Transfer Act of 2017 simplified and modernized property law. The judicial system is independent and functions well. New Zealand ranked 1st among the 180 countries surveyed in Transparency Internationals 2020 Corruption Perceptions Index. Stiff penalties against bribery of government officials and those who accept bribes are strictly enforced.

The top income tax rate is 33 percent, and the top corporate tax rate is 28 percent. Other taxes include goods and services and environmental taxes. The overall tax burden equals 32.3 percent of total domestic income. Government spending has amounted to 39.4 percent of total output (GDP) over the past three years, and budget deficits have averaged 2.3 percent of GDP. Public debt is equivalent to 41.3 percent of GDP.

The governments strict shutdowns of the economy decimated tourism. The government began to tax online businesses at 15 percent and is considering additional taxes. A wage subsidy of 80 percent of private companies salaries has kept unemployment under control during the crisis, but it also has significantly increased public debt. The government has introduced new subsidies for electric vehicles and for housing and urban development.

New Zealand has 13 preferential trade agreements in force. The trade-weighted average tariff rate is 2.5 percent, and 247 nontariff measures are in effect. Overall, openness to global trade and investment is firmly institutionalized. Banking is well established and competitive. To support the financial systems stability and liquidity during the pandemic, implementation of a higher capital reserve requirement for banks has been postponed.

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New Zealand - The Heritage Foundation

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Singapores economic freedom score is 84.4, making its economy the freest in the 2022 Index. Singapore is ranked 1st among 39 countries in the AsiaPacific region, and its overall score is above the regional and world averages.

Over the past five years, Singapores economy has grown slowly except in 2020, when it contracted. Economic freedom has been maintained at a very high level during that period, at or near the top of the Index. Singapores highly developed free-market economy owes its success in large measure to its remarkably open and corruption-free business environment, prudent monetary and fiscal policies, and a transparent legal framework. Trade freedom is strong, and well-secured property rights promote entrepreneurship and innovation effectively. The overall rule of law is undergirded by a high degree of transparency and government accountability.

IMPACT OF COVID-19: As of December 1, 2021, 726 deaths had been attributed to the pandemic in Singapore, and the governments response to the crisis ranked 77th among the countries included in this Index in terms of its stringency. The economy contracted by 5.4 percent in 2020.

Singapore is one of the worlds most prosperous nations and has both a business-friendly regulatory environment and a very low unemployment rate. Despite an active parliamentary opposition, it has been ruled by one party, the Peoples Action Party (PAP), for many decades. Prime Minister Lee Hsien Loong has led the government since 2004 and has suggested a near-term leadership transition. Although certain civil liberties remain restricted, the PAP has championed economic liberalization and international trade. Services dominate the economy, but Singapore is also a major manufacturer of electronics and chemicals and operates one of the worlds largest ports. Principal exports include integrated circuits, refined petroleum, and computers.

Although there are limitations on foreign ownership, property rights are recognized and enforced effectively. Judicial processes are reliable in business-related matters but tend to favor the government in politically sensitive cases. Singapore was ranked third out of 180 countries in Transparency Internationals 2020 Corruption Perceptions Index and is considered one of the worlds least corrupt countries. The anticorruption agency is very effective.

The top individual income tax rate is 22 percent, and the top corporate tax rate is 17 percent. Other taxes include a goods and services tax. The overall tax burden equals 13.2 percent of total domestic income. Government spending has amounted to 18.2 percent of total output (GDP) over the past three years, and budget deficits have averaged 0.5 percent of GDP. Public debt is equivalent to 128.4 percent of GDP.

Singapores business-friendly legal and tax structure, reliable infrastructure, and dependable regulatory processes provide a positive commercial environment. The government tightened restrictions on foreign labor in 2020. In 2021, the IMF estimated that government subsidies, grants, subventions, and capital injections to businesses and other organizations consume about 17 percent of GDP.

Singapore has 27 preferential trade agreements in force. The trade-weighted average tariff rate is 0.0 percent, and 182 nontariff measures are in effect. Foreign and domestic businesses are treated equally under the law, and nearly all sectors of the economy are open to 100 percent foreign ownership. The sophisticated financial sector is robust, and the number of foreign banks in the market has risen steadily.

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Singapore Economy: Population, GDP, Inflation, Business, Trade, FDI ...