New Zealand exits recession as Q4 growth beats estimates
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The news: New Zealand’s gross domestic product (GDP) rose 0.7% in the December quarter, beating economists' estimate for 0.4% growth and taking the economy out of recession.
The numbers: GDP per capita rose 0.4% during the quarter, its first increase in two years, according to new figures from Stats NZ. The economy contracted a revised 2.2% over the second and third quarters of last year.
11 of the 16 industries increased GDP production during the quarter. The largest rises were from rental, hiring and real estate services; retail trade and accommodation; and healthcare and social assistance.
The largest falls were in construction, and information media and telecommunications. Construction fell 3.1% in the December quarter, continuing a decline that began in the March 2024 quarter.
The expenditure measure of GDP rose 0.8% during the December quarter, following a 0.9% fall in the September quarter. Household consumption expenditure rose 0.1% this quarter, with increased spending on durable items such as audio-visual and telecommunication equipment.
The context: The new figures follow a series of rate cuts by the Reserve Bank of New Zealand (RBNZ), aimed at increasing demand as inflation returns towards its target range.
The RBNZ has also signalled further rate reductions this year, though the country's economic recovery continues to grapple with stagnating house prices, rising unemployment and global trade tensions.
What they said: “Higher spending by international visitors led to increased activity in tourism-related industries such as accommodation, restaurants and bars, transport, and vehicle hiring,” Stats NZ spokesperson Katrina Dewbery said.
“The fall in information media and telecommunications was driven by decreases in telecommunications and internet services, and broadcasting and internet publishing services.”
