NZ rates seventh in growth potential

New Zealand has been ranked seventh in the world in a report that looks at the growth potential of countries.

The Merrill Lynch report, dated August 30, measured 35 countries on five criteria - capital supply, technology, people, government and risks.

Sweden topped the list, followed by Singapore, Australia, the United States, Canada, the Netherlands, New Zealand, Germany, the United Kingdom and Hong Kong.

The report said that back-testing showed its "global ranking system" scores were strongly correlated with GDP and equity price growth.

The purpose of the study was to create a ranking of economic growth potential among 35 countries, and its goal was to help investors recognise profitable opportunity in countries that might look attractive.

Deputy Prime Minister Jim Anderton, commenting on the report yesterday, said it gave "a more balanced" view of an economy than a simple measure of gross domestic product (GDP).

"This is an attempt to evaluate societies on a much broader basis.

"That is a valuable reminder that, when you measure across a wide range of indicators, New Zealand comes out quite well," he said.

"Our focus is on long-run growth performance.

"We are looking five and 10 years ahead - not five months ahead."

Countries in the Organisation for Economic Co-operation and Development (OECD) dominated the rankings, occupying 10 of the top 12 spots.

A diverse group of less-developed countries in South Asia, Latin America and Eastern Europe gathered the lowest total scores.

Low levels of technological and educational attainment and endemic Government corruption were key factors behind these low scores, the report said.

"The broad conclusions are bullish for future growth in GDP and earnings."

- NZPA