Subdued growth in GDP
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.