Sub­dued growth in GDP

Marlborough Express - - FRONT PAGE -

New Zealand’s econ­omy con­tin­ues to cool, ex­pand­ing by 0.5 per cent in the first three months of the year, roughly the rate of pop­u­la­tion growth.

Fig­ures from Sta­tis­tics New Zealand re­leased yes­ter­day show gross do­mes­tic prod­uct (GDP) grew by 0.5 per cent in the March quar­ter.

An­nual growth eased to 2.7 per cent, the low­est in 31⁄2 years. After peak­ing at 4 per cent at the end of 2016, the an­nual growth rate has now eased lower in five con­sec­u­tive quar­ters.

The fig­ures were largely ex­pected by bank econ­o­mists, who have warned the econ­omy is slow­ing. The New Zealand dol­lar was lit­tle-changed after the fig­ures were re­leased.

‘‘The New Zealand econ­omy has lost some mo­men­tum in re­cent times, with growth in the last three quar­ters match­ing or barely ex­ceed­ing pop­u­la­tion growth,’’ West­pac se­nior econ­o­mist Michael Gor­don said.

‘‘We have been an­tic­i­pat­ing a pe­riod of sub­dued growth through the first half of this year, re­flect­ing busi­nesses’ un­cer­tainty about the new Gov­ern­ment’s poli­cies. How­ever, in­creased fis­cal spend­ing should pro­vide a boost to ac­tiv­ity from the sec­ond half of this year on­wards.’’

Fi­nance Min­is­ter Grant Robert­son said the fig­ures were in line with ex­pec­ta­tions and pointed to healthy growth fore­casts from econ­o­mists.

‘‘We are on track to de­liver growth of around 3 per cent per an­num over the next five years – as fore­cast at Bud­get 2018, and by NZIER’S con­sen­sus fore­casts,’’ Robert­son said.

In the lat­est quar­ter, GDP per per­son ac­tu­ally fell slightly, but Robert­son pointed out that growth per capita had been weak for longer than just re­cent months.

‘‘GDP per capita an­nual growth of 0.6 per cent em­pha­sises why this Gov­ern­ment has a tar­geted plan to lift pro­duc­tiv­ity and cre­ate an econ­omy that is more pro­duc­tive, more sus­tain­able and more in­clu­sive.’’

Amy Adams, Na­tional’s fi­nance spokes­woman, said the New Zealand econ­omy was slow­ing as the world econ­omy was pick­ing up speed.

‘‘Th­ese dis­ap­point­ing GDP fig­ures come on the back of busi­ness con­fi­dence fall­ing, busi­nesses’ view of their own ac­tiv­ity de­clin­ing, and con­sumer con­fi­dence de­te­ri­o­rat­ing,’’ she said.

Sta­tis­tics NZ fig­ures show the New Zealand econ­omy is grow­ing at the same rate as the OECD av­er­age on an an­nual ba­sis, slightly stronger than Europe but weaker than the US.

Econ­o­mists have warned that a cool­ing in the econ­omy risked caus­ing a gen­eral slow­down, even though the over­all pic­ture for the econ­omy was pos­i­tive.

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