National savings for the entire New Zealand economy were NZ$3.173 billion in the year ended March 2010 as national disposable income rose more than consumption spending, Statistics New Zealand said in its annual National Accounts released today.
National savings were up from NZ$7 million in the year to March 2009, but down from just over NZ$4 billion in 2008.
"Spending (final consumption expenditure) by households increased 2%, the lowest percentage increase since the year ended March 1993 (up 1.8%). General government spending was up 2.5%," Stats NZ said.
"National disposable income, which measures the income available to New Zealand residents for current consumption or saving, rose 4.3% in the year ended March 2010. The increase in national disposable income was larger than the increase in spending (final consumption expenditure), resulting in higher national saving."
The debate on how to measure savings rates in the economy has been ramping up over the last year, and while the government has set up a Savings Working Group to look at the issues, some commentators such as Michael Littlewood are saying New Zealand does not have a savings problem.
Here is the release from Stats NZ:
Household spending rose 2.0 percent in the March 2010 year, the lowest percentage increase since the year ended March 1993 (up 1.8 percent), Statistics New Zealand said today.
"The slow rise in household spending compares with increases of at least 4 percent between 1994 and 2008," acting national accounts manager Jason Attewell said.
Spending on all transport sub-categories was down in the year ended March 2010, with the largest decline being in vehicle operations such as repairs and maintenance. A fall in spending on furniture and major appliances was also recorded, driven by a fall in prices.
Gross domestic product (GDP) in current prices increased 1.2 percent for the year ended March 2010.
This is the smallest increase since the year ended March 1992 and follows a 1.8 percent increase in the March 2009 year.
Contributing to the low increase in GDP in the March 2010 year were:
- compensation of employees rising 1.1 percent, compared with the previous year's increase of 5.7 percent
- gross operating surplus (business profits) increasing 0.4 percent for the year ended March 2010.
National disposable income, which can be used for consumption or saving, rose 4.3 percent for the year ended March 2010. Contributing to this was a decrease in net investment income paid to the rest of the world, down from $13.0 billion in 2009 to $7.6 billion in the year ended March 2010.
National saving (for the whole economy) was $3.2 billion in the year ended March 2010. This compares with near zero saving for the year ended March 2009. Higher national saving was a result of the increase in national disposable income and the slowing of household spending.