The bank’s chief economist says ANZ still believes recession is coming, probably in the third quarter.
ANZ economists say the economy may escape a further fall in growth in the first quarter of the year, thus avoiding a technical recession.
The bank’s latest Truckometer showed a 4.6 percent lift in light traffic in March on the previous month, the highest in seven months, while its heavy traffic index increased 2.7 percent.
“Overall the data can be characterised as consistent with consumer spending cooling as RBNZ [the Reserve Bank of New Zealand] rate hikes continue to bite.”
The light traffic measure is an indication of consumer spending while the heavy traffic index points to economic production.
The economy shrank by a surprise 0.6 percent in the three months ended December.
“So far, heavy traffic is not showing anything like the sharp declines seen in the global financial crisis.”
Zollner said if the economy contracted in the first quarter it would most likely be “noise” around supply-side and weather impacts.
“That doesn’t mean a recession isn’t coming … we are forecasting the ‘real’ recession to start in the third quarter of this year.”
Credit: radionz.co.nz
