KEY POINTS:
High petrol prices may hurt at the pump but can also mean good news for our economy, says Westpac economist Doug Steel.
Crude oil prices are a measure of total global demand, Steel said.
"If the US was pulling down the emerging markets such as China and India, you would expect crude oil prices to be coming off but given that they're still bumping around record highs that suggests that domestic demand in China and other emerging markets are just holding up there and that's certainly going to be good for demand for our products," Steel said.
Petro-economies were also key markets, with the proportion of dairy exports increasing from 13 per cent to 23 per cent during the previous 10 years and accelerating, he said. "Petro-economies are also taking a larger share of our other primary exports including sheepmeat, beef, forestry and fruit and vegetables," Steel said. "It certainly feels to me that gone are the days that high petrol prices are purely bad news for New Zealand."
The US and Europe were losing economic influence over New Zealand.
"It is now the developing world that means the most for New Zealand's prospects," Steel said. "When rich countries get richer, they buy bigger cars and faster computers. When poor countries get richer, they eat more protein and build houses.
"As a large milk, meat and forestry exporter, New Zealand therefore does best when developing nations are growing strongly, pushing up the prices of primary products."
