Subdued growth in GDP lags population rise
New Zealand’s economy continues to cool, expanding 0.5 per cent in the first three months of the year, at roughly the rate of population growth.
Statistics New Zealand figures 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.
During the same period the New Zealand population grew by 0.6 per cent, with the Government’s opponents pointing that growth per capita was going backwards.
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.
‘‘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,’’ Westpac senior economist Michael Gordon said.
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.’’
In the latest quarter, GDP per person fell slightly, but Robertson pointed out that growth per capita had been weak for longer than 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 economy is growing at the same rate as the OECD average on an annual basis.