Services, and population growth see NZ economy expand by almost 3%

Postado Março 15, 2018

"We continue to expect the RBNZ to leave the official cash rate on hold until the second half of 2019", said Nick Tuffley, chief economist at ASB.

Gross domestic product expanded 0.6 percent in the three months to December 31, versus a 0.6 percent expansion in the third quarter, and was 2.9 percent higher on the year, Statistics New Zealand said.

The size of the economy in current prices was $283 billion.

That left GDP per capita growth over the year at 0.7%, the weakest level since 2011.

Westpac expects growth to remain at a more subdued pace this year, as the new Government's policies - particularly around cooling the housing market - are expected to be a drag on activity on balance.

"The economy is not firing on all cylinders, but neither is it rolling over to any worrying degree".

New Zealand government bonds edged higher sending yields about 2.5 basis points lower at the long end of the curve.

In terms of monetary policy implications, Kiwibank Senior Economist Jeremy Couchman says the numbers won't worry the Reserve Bank, as it remains in line with the central bank's view that the economy is growing near trend.

"Hot, dry weather appeared to have a negative impact this quarter on agriculture production, which fell 2.7%", it said.

Overall agricultural production fell by 2.7 per cent, with lower milk production hitting dairy manufacturing and dairy exports, which fell 4.4 per cent.

"Growth was widespread across many service industries, with business services, and rental hiring and real estate services providing momentum", said Gary Dunnet, national accounts senior manager at StatsNZ.

StatsNZ said household expenditure - the largest part of the New Zealand economy at around 60% - grew by 1.2% over the quarter.

This was reflected in the retail trade and accommodation industry, with activity in food and beverage services and supermarkets increasing.

"Imports of capital goods such as aircrafts, factory equipment, and ICT increased considerably this quarter", Mr Dunnet said.

Investment in fixed assets also contributed to growth, rising by 2.1%.

The kiwi dollar traded at 73.27 U.S. cents as at 8am in Wellington from 73.39 cents late yesterday.