NZ’S last GDP growth for a while?

New Zealand’s gross domestic product grew 0.5 per cent in the last three months of last year, before the coronavirus emerged.

The impacts of Covid-19, along with a drought and drought-relief package announced by the Government on March 12, will be seen in the March 2020 quarter results, due for release in June. Economists have said a recession is inevitable for New Zealand after border restrictions were imposed, and as more people selfisolate and worried consumers shut their wallets.

GDP growth was up 1.8 per cent on a year ago, compared with 2.3 per cent annual growth in the previous quarter.

The December quarter growth followed a rise of 0.8 per cent in the previous quarter, Statistics NZ said yesterday.

ASB said the quarterly growth of 0.5 per cent was in line with market expectations and slightly above the Reserve Bank’s forecast in February. ‘‘The Covid-19 coronavirus outbreak over the early months of 2020 has reshaped the NZ and global economic outlook, making Q4 2019 GDP outdated information,’’ said ASB senior economist Jane Turner.

‘‘We are currently updating our economic forecasts and see the economy contracting 3-3.5 per cent over 2020, with risks skewed to a greater contraction.’’

On Monday, the Reserve Bank cut the official cash rate to 0.25 per cent in an unscheduled announcement, after the Government announced on Saturday almost all people coming into New Zealand would need to selfisolate. The central bank has said the rate will not change for the next 12 months as it saw ‘‘very weak economic activity’’ ahead.

The country was now at the beginning of a significant economic downturn, ANZ economists said. ‘‘Monetary and fiscal stimulus announced this week will cushion the blow, and more Government support is on the way.

‘‘And yet, still more stimulus is needed. We expect the RBNZ will need to start large-scale asset purchases soon. Market intervention is also urgently needed.’’

Westpac economists expect GDP to decline 3.1 per cent over the first three quarters of this year, and forecast unemployment to rise from 4 per cent to 5.5 per cent, or by 45,000 people.

Household spending was already softening in the December quarter, up 0.3 per cent with annual growth slowing to its lowest level in six years, at 2.7 per cent. ‘‘Reduced spending on short shelf-life goods such as food, beverages, and tobacco slowed the growth in household consumption this quarter,’’ said Statistics NZ senior manager Ruvani Ratnayake.

Eleven of the 16 industries recorded an increase in growth.

The size of the economy in current prices was $311 billion.