The New Zealand economy has climbed out of recession after GDP rose by 0.7% in figures released today.
The economy had previously met the widely accepted definition of recession, with two successive quarters of contraction.
It fell 1% in the September quarter after being down 1.1% in the three months to June.
Today’s numbers showed 11 of the 16 industries surveyed saw an increase this quarter, which ran from October to December last year.
The largest rises were from rental, hiring and real estate services as well as retail trade and accommodation, Stats NZ said.
Healthcare and social assistance also grew. At the other end of the scale, the largest falls were in construction, and information media and telecommunications.
“Higher spending by international visitors led to increased activity in tourism-related industries such as accommodation, restaurants and bars, transport, and vehicle hiring,” Stats NZ economic growth spokesperson Katrina Dewbery said.
Household expenditure only rose by 0.1%, with increased spending on durable technology items.
The construction sector continues to be a concern, falling 3.1% in the December quarter. It has been declining since the start of 2024.
‘NZ can look forward to better days’ — Willis
Finance Minister Nicola Willis said Kiwi families and business could “look forward to a better future” due to today’s GDP figures.
“A growing economy means more opportunities, more jobs, higher incomes and, ultimately, better health, education and other public services.”
Of particular interest to Willis was a 0.4% increase in GDP per capita — the average economic output per person in a country per year. It was the first time this figure had risen in two years.
An export increase of 3.5% this quarter, fuelled in part by increased international visitor spending, was also pleasing to see, she said.
“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.”
Growth predicted
A Reuters poll of economists had predicted the economy would lift out of recession in today’s numbers, forecasting 0.4% growth between October and December 2024.
It also said of the previous results: “The two-quarter GDP decline was the worst outside of the pandemic since the sharp downturn of 1991.”
Kiwibank, in its regular update last week, said there were signs of good news in the economy — pointing to an increase in export prices for dairy and meat products, strong production and a lower Kiwi dollar.
However, it added a cautionary note, referring to ongoing tariff threats initiated by the Trump administration in the US: “Unpredictability and confusion continue to be the central themes across markets and global economies.”
