Economy grows 0.9%, doubts grow whether there was a recession earlier this year

The economic system grew by a a lot stronger than anticipated 0.9% in three months to the top of June on account of what is predicted to be a short lived blip.

Stats NZ stated it was additionally not sure whether or not its figures would in the end estimate GDP rose or fell within the March quarter, which means there’s nonetheless a query mark over whether or not or not there was a technical recession earlier this yr.

The Reserve Financial institution forecast final month that GDP would rise 0.5% within the June quarter, whereas the Treasury estimated 0.6% development when it launched its Pre-election Financial and Fiscal Replace (Prefu).

Westpac was extra opitmistic and proved to be nearer to the mark, after forecasting 0.8% development.

Stats NZ beforehand reported GDP fell 0.1% within the March quarter, which might have been the second consecutive drop, marking a technical recession.

However its newest estmate is that GDP fell by solely about $5 million then.

That quantity might be topic to future revisions and economics insights supervisor Jason Attewell stated Stats NZ was now describing GDP as being “flat” that quarter, given the doable margin of error.

GDP development per capita within the June quarter was 0.2%, Stats NZ stated, which means the economic system grew at a barely quicker fee than might be accounted for by inhabitants development alone.

The newest quarterly GDP determine took financial development within the yr to the top of June to three.2%.

However economist are forecasting little or no development within the yr forward, with GDP per capita anticipated to fall.

Attwell stated extra exercise within the enterprise providers market, together with “laptop system design”, was the largest driver of development inthe June quarter.

Different sectors that contributed to the expansion included public administration, “security”, defence, the hirig and rental sectors and actual property providers.

Manufacturing exercise additionally elevated after 5 consecutive quarters of declines.