New Zealand tipped into recession within the third quarter, official knowledge confirmed Thursday, with the economic system struggling an unexpectedly sharp stoop that despatched the nation’s foreign money tumbling and sparked political finger-pointing.
The New Zealand greenback was buying and selling within the late afternoon at US$0.5626 — down about 1.8 % from yesterday.
The conservative coalition authorities defended its “respect for taxpayers’ money” because the opposition accused it of feeding a “recessionary fire”.
The economic system has for months teetered on the verge of recession, with client sentiment weighed by excessive costs, elevated borrowing prices and a housing disaster.
However the newest figures confirmed gross home product fell a bigger-than-expected 1.0 % July-September from the earlier three months. Analysts had forecast a contraction of 0.2 %.
That marked the second quarterly contraction in a row, after shrinking a revised 1.1 % in April-June.
“Yes, the one percent decline in activity is huge. And it’s much weaker than anyone had anticipated,” mentioned a report by Kiwibank economics.
Excluding an financial decline in the course of the Covid-19 pandemic, the New Zealand economic system had posted the weakest six-month interval since 1991, it mentioned.
“And weakness is spreading across most industries,” the report mentioned.
Nevertheless, the current drop was partly balanced out by a statistical revision of progress upwards earlier within the 12 months, Kiwibank mentioned.
And the newest quarter stands out as the final within the cycle of decline, it mentioned, with a one % reduce in rates of interest over the quarter possible to supply aid going ahead.
The New Zealand greenback was buying and selling within the late afternoon at US$0.5626 — down about 1.8 % from yesterday — as the dimensions of the stoop took merchants without warning.
“The latest economic figures highlight the importance of the steps the government has taken to restore respect for taxpayers money and drive economic growth,” the federal government mentioned in a press release.
Finance Minister Nicola Willis mentioned the economic system had now contracted for eight quarters on a per-capita foundation.
“The decline reflects the impact of high inflation on the economy. That led the Reserve Bank to engineer a recession which has stifled growth,” she mentioned.
However she predicted the economic system would decide up within the subsequent quarter, and develop extra strongly in 2025.
The opposition Labour Social gathering mentioned the recession was of the finance minister’s making.
“Nicola Willis’ cuts and austerity has fed the recessionary fire,” mentioned Labour finance spokesperson Barbara Edmonds. “There’s no creative accounting that Nicola can do to make these GDP figures better.”