New Zealand governments have pursued economic policies that have transformed a strongly regulated welfare state into an open-market economy. The economy has been deregulated by the removal of subsidies, tariffs, import duties, and fiscal controls. In addition, the state has withdrawn progressively from direct involvement in production, service provision and delivery, welfare support, and manipulation of currency and financial markets. Primary production is becoming less remarkable as a direct contributor to export receipts and gross domestic product (GDP). Service industries, particularly those associated with a booming tourist industry, are becoming much more prominent.New Zealand is a prosperous nation with a high standard of social services. The nation’s GDP was $54.7 billion in 1999. Some 67 % of the GDP derives from services, 26 % from industry, and 7 % from agriculture, forestry, and fishing. The national economy is largely dependent on the export of raw and processed foods, timber, and wool. Any fluctuation in world prices and demand affects the economy. In 1998 the government budget included revenues of about $18.1 billion and expenditures of $17.7 billion.

Most minerals, metallic and nonmetallic, occur in New Zealand, but few are found in sufficient quantities for commercial exploitation. The exceptions are gold, which in the early years of organized settlement was a major export; coal, which is still mined to a considerable extent; iron sands, which are exploited both for export and for domestic use; and, most newly, natural gas. In addition to mining, construction materials, with which the nation is well endowed, are quarried.Apart from gold's brief heyday, biological resources have always been more remarkable than minerals. Domestic animals introduced from Europe have thrived in New Zealand. Forestry has always been valuable, but the emphasis has swung from felling the original forest for timber to afforestation with pine trees for both timber and pulp.

Since 1984 the government has accomplished major economic restructuring, moving an agrarian economy dependent on concessionary British market access toward a more industrialized, free market economy that can compete globally. This dynamic growth has boosted real incomes, broadened and deepened the technological capabilities of the industrial sector, and contained inflationary pressures. Inflation remains among the lowest in the industrial world. Per capita GDP has been moving up toward the levels of the big West European economies. New Zealand's heavy dependence on trade leaves its growth prospects vulnerable to economic performance in Asia, Europe, and the US. With the FY00/01 budget pushing up pension and other public outlays, the government's ability to meet fiscal targets will depend on sustained economic growth.