GDP $USD 0.02 billions
GDP Per Capita: $USD 11,100
Currency NZD (New Zealand dollar $)
Imports $USD 0.04 billions
Exports $USD 0.01 billions
Main Industries Handicrafts, Food processing

The ‘Know Your Region’ series is designed to support unit and individual professional military education on the Indo-Pacific region. It’s important for all serving members of our military to have a foundational knowledge of the countries and issues in the Indo-Pacific.

On this Page:

  • Summary
  • Financial Aid
  • Agriculture
  • Fishing
  • Tourism

Summary

Niue has struggled to develop a sustainable economy due to the island’s remoteness and limited natural resources. Both factors hinder the development of large-scale industries and contribute to high production and transportation costs.

With a GDP of $31 million, Niue is the smallest economy in the Pacific, accounting for less than 0.1% of regional GDP. Historically, the economy has relied on subsistence agriculture, fishing, small scale trade, foreign aid, and remittances from diaspora living abroad. An estimated 31,000 Niueans reside in New Zealand and 6,500 in Australia, dwarfing the island’s population of approximately 1,800. The migration of Niueans to New Zealand and other countries has reduced the local workforce resulting in critical labour shortages.

Financial Aid

New Zealand has provided considerable financial assistance and technical support, especially for infrastructure. In 2024, New Zealand pledged more than $20 million to a new renewable energy project that, once completed, will generate up to 80 percent of the island's electricity. The project aims to reduce Niue’s reliance on diesel fuel, which is expensive to import, and will promote the nation’s sustainable image. New Zealand also provides much needed grants that are used to pay wages to public employees.

Since establishing diplomatic relations in 2007, China has also emerged as an important trading partner and has provided ongoing development assistance. In 2018, Niue signed up for China’s Belt and Road initiative and since then, both countries have vowed to deepen bilateral cooperation. In October 24, China officially handed over the ‘China-aided roundabout road upgrade’ project undertaken by the China Railway First Group Co.

Agriculture

Agriculture remains Niue’s primary source of income with crops such as taro, yams, and coconuts being staples for locals and for occasional exports. It also produces some cash crops for export, such as vanilla, noni (a fruit used in health products), and honey. Vanilla is particularly important as Niue's organic vanilla has garnered international recognition for its quality. In recent years, honey production has also gained traction due to the island's unique and disease-free bee population, which produces some of the purest honey in the world. Despite these successes, agricultural output is limited by the island's small land area, soil conditions, and vulnerability to natural disasters.

Fishing industry

Niue has a vast exclusive economic zone (EEZ) covering approximately 390,000 km2. However, the island's fishing industry is underdeveloped, focusing mainly on subsistence and artisanal fishing. Efforts to commercialise fisheries have been hindered by the lack of large-scale infrastructure and the high costs associated with exporting seafood. Nevertheless, Niue has been exploring sustainable fisheries and partnerships to better utilise its marine resources.

Tourism

Tourism is a growing sector. The island markets itself as a niche destination for eco-tourism that specialises in adventure style activities including diving, whale-watching, and sports fishing. Annual tourist arrivals have been modest, typically numbering in the low thousands. This is partly due to limited flight availability, accommodation options, and infrastructure. There are only two flights to the island from New Zealand per week and only 31 places to stay. There is also only one basic health facility. The sector also experienced setbacks during the COVID-19 pandemic but is slowly recovering.

Trade

Niue's export base is narrow, comprising mostly agricultural products like vanilla, honey, and noni juice, along with a small quantity of fish, handicrafts, and collectors’ items such as stamps. Imports, on the other hand, far outweigh exports and include food, machinery, vehicles, and fuels. The trade imbalance is a persistent challenge, with Niue relying on foreign aid and remittances to cover its economic shortfalls.

Niue's primary trade partner is New Zealand, which accounts for the majority of its imports and provides a vital market for its exports. Other trade partners include Australia, China, Fiji, and a few other Pacific nations. Close ties with New Zealand have been essential for Niue's economic stability. The economic benefits of the free association relationship have been a key factor in Niue’s decision to not seek full independence.

Niue aims to strengthen its economy through niche markets and sustainable development. The government has been exploring renewable energy projects, digital infrastructure, and is further developing tourism and high-value exports like organic products and honey. Partnerships with international organisations and neighbouring countries will continue to underpin Niue’s economic prosperity.

For more information on Niue’s economy, see the resources below:

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