New Zealand's economy has grown by 3.6 per cent in the past year, one of the top performers in the OECD - ahead of Australia, the US and UK.

The dairy slump has failed to put a dent in our gross domestic product as tourism and construction have continued to boom.

The property boom may also be creating a wealth effect and helping boost retail spending.

But as Labour's Grant Robertson was quick to point out yesterday, record immigration has also driven growth and means that relative international performance looks less impressive on a per capita basis.


So what does it mean? Are we really getting richer?

Those New Zealanders with houses and shares certainly are - at least on paper. Like almost every economy in the Western world, New Zealand is stuck in a low inflation, low interest rate cycle.

With investors getting poor returns from the bank, assets like property and shares have boomed. But inflation in other areas - including wages - has been subdued.

So if you don't have assets you are really missing out on the party.

That's making many Kiwis uneasy - even some Aucklanders in their million-dollar homes.

Still, business and consumer confidence are up and point towards more growth in the coming year.

We may see construction levels come off as the Christchurch rebuilds wind down but if dairy can continue its comeback then these levels may be sustainable.

We could see per capita growth lift as record migration peaks. There may even be some inflation upside, including wage growth, as pressure builds in the labour market.

One big variable is the global economy. Right now it is all eyes on America, where markets are in a mild state of panic about the prospect of interest rate rises.

Despite the strong local GDP figure our Reserve Bank is still expected to cut interest rates once more this year, probably in November. It is also worth keeping an eye on the weather.

As eclectic as we like to think our rock star economy is, we still rely on agricultural exports.

It is now more than eight years since New Zealand had a recession. The last one wasn't caused by the global financial crisis in 2008, it was caused by drought.