New Zealand’s economy returns to growth with GDP | Australian Markets

New Zealand’s finance minister Nicola Willis says the Kiwi economy has “turned the corner” after returning to growth with a 0.7 per cent gross home product elevate within the final quarter of 2024.

After enduring its worst six-month downturn in more than three a long time – COVID lockdowns excluded – the Kiwi economy is again displaying indicators to life.

Alongside the 0.7 per cent This fall bump, the economy additionally ended an eight-quarter run of GDP per capita falls, growing by 0.4 per cent.

Ms Willis known as that “particularly pleasing”.

“We still have a way to go to get to where we want to be, but with economic forecasters predicting further growth in the quarters ahead things are looking up,” she mentioned.

The 0.7 per cent rise was above analysts’ expectations, with the Reserve Bank tipping a rise of 0.3 per cent, and native banks unfold between 0.2 and 0.5 per cent.

While welcome, there may be no sugar-coating the hit to the Kiwi economy over 2024.

Annual growth was destructive 1.1 per cent, led by a large 7.3 per cent fall within the construction sector.

Stats NZ spokeswoman Katrina Dewbery mentioned 11 of their 16 industry classes grew within the final quarter, led by housing, retail trade and lodging.

“Higher spending by international visitors led to increased activity in tourism-related industries such as accommodation, restaurants and bars, transport, and vehicle hiring,” Ms Dewbery mentioned.

Westpac chief economist Michael Gordon mentioned seasonal points overstated the power of the This fall outcome, there was “some genuine growth” within the knowledge release.

“We’d call this a genuine upside surprise,” he mentioned.

The result’s undoubtedly good news for each the economy and the federal government, which has put financial growth on the forefront of its political agenda this 12 months.

Exports additionally grew by 3.5 per cent final quarter, serving to to slender the present account deficit by nearly half a billion {dollars} to $NZ5.9 billion ($A5.4 billion).

Unlike Australia, New Zealand has suffered a onerous touchdown in its post-pandemic financial restoration, going by means of a recession final 12 months following tough-as-nails remedy from the Reserve Bank (RBNZ).

The RBNZ has since loosened its settings, dropping the official money charge from 5.5 per cent, the place it sat final August, to its present degree of 3.75 per cent, with future falls to come.

ASB bank economist Wesley Tanuvasa mentioned the size of the GDP growth would not trigger a rethink from the central bank.

“Our first take is that this will be a welcome surprise to the RBNZ, but there won’t be enough here to force the bank to diverge from its February (official cash rate) trajectory,” he mentioned.