New Zealand falls into recession
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The news: New Zealand’s economy has fallen into a recession after its GDP unexpectedly contracted in the final three months of 2023.
The numbers: Gross domestic product dropped 0.1% in the December quarter, data from Statistics New Zealand showed. It compared with economists’ expectations for a 0.1% increase.
The data confirmed a technical recession, with the economy having declined 0.3% in the previous three months.
The context: New Zealand’s economy has tipped into a recession in the face of its central bank’s aggressive monetary policy tightening as it tries to bring inflation under control.
The Reserve Bank of New Zealand has held the official cash rate steady at 5.5% since May 2023, and last month signalled it would not lower rates until 2025. However, the weak data is likely to increase pressure on policymakers to consider rate cuts earlier than indicated.
