New Zealand is on track to outperform world trade growth as increasing demand from Asia and Latin America fuels agricultural exports, say economists for the HSBC bank.
New Zealand's trade will grow at an annualised rate of 5.9 per cent over the next five years, outperforming forecast world trade growth of 3.8 per cent annually.
The trend is expected to continue into the next decade with New Zealand's growth predicted to rise a further 7.3 per cent between 2017 and 2021 annually, compared to world growth on 6.2 per cent, according to the latest HSBC Global Connections report.
"New Zealand is in the right geography and in the right industries to take advantage of accelerating trade trends," said Gary Cross, head of global trade and receivables finance at HSBC. "As millions more people within the emerging markets of the Southern Hemisphere move up to the middle classes, demand for our agricultural, meat, wood and wine products can only increase."
Australia will remain New Zealand's largest trading partner, at an annual predicted growth rate of 7.5 per cent over the next five years, while exports to China, the country's second largest export partner, is seen accelerating swiftly at 12.6 per cent annually.
"The speed at which businesses will have to grow may seem challenging, but the reality is that growth opportunities for New Zealand lie internationally."
Exports of milk, cream, lamb and goat to China are set to increase 16.5 per cent annually. Milk and cream exports to Peru, Venezuela, Cambodia and Bangladesh are all forecast to grow sustainably over the next five years.