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NEW ZEALANDERS' real incomes could be heading back up the list of wealthy Western countries as exports yield better prices and import prices fall, says National Bank chief economist John McDermott.
New Zealanders typically bemoaned that income per capita had been declining and feared it was "doomed" to continue.
But in the past 10 years, that trend has been arrested and prospects were that it could soon reverse, he said.
Latest figures rank New Zealand 20th out of the 28 members of the Organisation for Economic Co-operation and Development in income per capita terms.
But New Zealand's slide in relative living standards had stabilised, the OECD said in a report, although acceleration back into the top half ranking was still not in sight.
Kiwis on average earn $180 a week less than Australians, $150 a week less than Britons and about $400 a week less than Americans.
But Mr McDermott said New Zealand was heading in the right direction, despite heavy dependence on the. rural sector. Put simply, New Zealand grew sheep and trees, put them into containers, and got DVD players and digital cameras back in return.
But New Zealand exports had more to offer, especially as overseas consumers became more wary.
Supermarket shoppers, for example, wanted to know the origin of products and that they were safe. "There are opportunities for an economy like this.
"There is hope on the export side that we are not just selling commodities any longer, we are selling a more differentiated product and that will enhance the export price."
That, coupled with the dramatic fall in import prices, could push New Zealand's real incomes up.