‘GDP growth will be down’
Winston Peters says today’s economic growth figures will be ‘‘down’’, while taking credit for predicting the slowdown back in 2017.
However, the deputy prime minister expects the figures to show New Zealand is still economically outperforming other developed economies.
Peters is not alone in his pessimism. There is consensus among economists that the Government’s quarterly gross domestic product (GDP) figures, released this morning, will show further softening in the economy.
The New Zealand Institute of Economic Research’s consensus forecast – which takes the views of several forecasters – suggests GDP growth could slow to 2.3 per cent over the coming year.
GDP growth for the year to 2019 was 2.7 per cent.
Asked whether GDP growth would slow, a caustic Peters responded, ‘‘will they be down? Of course they’ll be down but we said so back then’’.
He pointed to a speech he made in 2017 when he chose to form a government with Labour, warning of ‘‘dark days ahead’’.
Peters said he made those predictions back in 2017, ‘‘just in case you [the media] start blaming us for the slowing down of the economy’’.
He pointed to ‘‘a whole host of things’’, including US President Donald Trump and China that were weighing on growth, but said New Zealand was still performing better than ‘‘nearly every other first world country’’.
New Zealand is currently one of the better performing economies in the OECD, a club of developed countries.
The OECD is currently averaging 1.6 per cent growth across the bloc, with the G7 of highly advanced economies – including the United States, the United Kingdom, and France – averaging just 1.6 per cent growth over the last year. Australia only grew at 1.4 per cent in the last year. But while New Zealand was still performing better than most developed countries, slower growth rates over the past two years mark a retreat from the highs of the last Government, where annual growth hit 4 per cent in 2015, and New Zealand was christened a ‘‘rockstar economy’’ by HSBC.
This has led to a blame game between the Government and the Opposition over who is responsible for the slowdown.
The Government said that average growth rates over nine years of the last Government and the two years of the current Government were roughly the same.
Prime Minister Jacinda Ardern said on Tuesday that New Zealand was being buffeted by ‘‘global headwinds’’, that had seen forecasters downgrade their growth predictions.
But the National Party claims the slowing economy is evidence of the Government’s mismanagement, and can’t only be put down to international problems.