New Zealand's strong economic growth story looks set to be underpinned this year by ongoing record net migration flows, economists said.

Statistics NZ (SNZ) data released yesterday saw record numbers of tourists and immigrants in 2016 with more migrants coming in on work visas and more holidaymakers than ever before. Economists expect migrant inflows to keep rising.

SNZ said annual net migration hit 70,600 in December 2016, with the biggest net migrant gains from China, India, the UK and the Philippines.

Migrant arrivals rose 4 per cent to 127,300 in the year, also a new record, while migrant departures dipped 0.5 per cent to 56,700. Short-term visitor arrivals, which includes tourists, people visiting family and friends and people travelling for work, reached 3.5 million last year, up 12 per cent from the year earlier.


"It's the same old story - New Zealand, globally, is an attractive place to be right now," ANZ chief economist Cameron Bagrie said.

"Strong migration is just another tailwind at our back," he said.

Economists expect growth in gross domestic product (GDP) this year of around 3 per cent plus.

The Bank of New Zealand expects GDP growth of 3.1 per cent and BNZ economist Doug Steel said ongoing strength in migration would put upward pressure on that forecast.

Strong migration and tourism have been a big part of the New Zealand growth story - along with construction and a rebound in dairy prices. On the supply side, there has been a boost to the labour market as well, Steel said.

"Population growth has certainly contributed to the headline GDP numbers, but it's worth noting that there has been per capital GDP growth as well, which suggests that there is more to the economic expansion than just population growth," he said.

"It (GDP growth) has risks to the upside, partly because population growth has been as strong as it is," he said.

New Zealand has imposed tougher criteria for skilled migrants and cracked down on applications for student visas over increased concerns about the level of immigration.

At the same time, the government has extolled the benefits of immigration, with a swelling population stoking more activity and record inflows of tourists underpinning an economy growing at a rapid pace.

A rising population has posed problems for policymakers by fuelling demand for an already-stretched housing market in Auckland, while restraining wage growth.

SNZ's data showed the most popular country of origin for permanent and long-term arrivals was Australia, with some 26,000 migrants coming to New Zealand in the year, but this was offset by about 24,000 long-term or permanent departures across the Tasman in the course of the year.

A net 10,310 migrants arrived from China in 2016, a 16 per cent lift on 2015, while a net 8,900 came from India, a drop of 33 per cent on the year earlier. There was a 54 per cent jump in net migration from the UK to 5,600.

The past year has seen a marked lift in arrivals from the UK and China. "The increase in arrivals is mainly due to more people coming on work or residency visa, which has offset a decline in the number of international students," Satish Ranchhod, senior economist at Westpac, said in a note.

"Second, the level of departures of NZ citizens is currently at very low levels, while the number of New Zealanders returning from offshore has risen steadily.

"These trends are expected to continue to some time, with NZ's positive economic story, including its labour market, making it a very attractive destination. We expect net migration inflows to remain strong for some time," Ranchhod said.

Of the new migrants who arrived in the year, a net 33,900, or 48 per cent, settled in Auckland, followed by a net 9.6 per cent who moved to Canterbury, net 5.2 per cent going to Wellington and net 3.9 per cent settling in Waikato.

- With BusinessDesk