The economy is “showing its resilience” according to Finance Minister Grant Robertson, who says the country’s GDP fell a “fraction” of 0.1 per cent during the first three months of the year.
“Ongoing strength in other parts of the economy helped mitigate the impact, with GDP being 2.9 per cent higher than it was a year ago.
“Today’s outcome fits the definition of a technical recession by the barest of margins. But the resilience of the New Zealand economy, including historically low unemployment, means it will not have the impact that would normally be associated with this term.
“New Zealand can handle these testing times and grow out the other side. Record numbers of people are in work, and wages are rising faster than inflation to help households with cost of living pressures. Just yesterday we announced that New Zealand’s food and fibre sector is on track to set a new record high, with export earnings to hit $56.2 billion by 30 June 2023, 2.3 per cent higher than projected.
“Tourism is also rebounding, with international visitors spending $3.2 billion in New Zealand in the first quarter of 2023, up from $1.8 billion in the December quarter and 600,000 visitors expected to arrive this winter.
Stats NZ reported today that central government consumption fell again in the March quarter, by 0.1 per cent, following falls of 2.8 per cent in December and 0.9 per cent in September.”
The Reserve Bank has indicated that interest rates have peaked and inflation is projected to fall, returning to the target range next year.
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