Consensus Expects Moderate Q1 GDP Decline

Q1 GDP prints on Thursday and is expected to decline for the second consecutive quarter. Bloomberg consensus is forecasting a moderate 0.1% q/q drop in the production measure after -0.6% in Q4, which would result in an annual increase of 2.6% after 2.2% (Q1 2022 fell 0.5% q/q). While this would constitute a technical recession, the series has been volatile recently. Also watch the expenditure measure for the state of domestic demand.

• Consensus is below the RBNZ, which is forecasting a 0.3% q/q rise in Q1. There is a chance that Q1 could see some payback for the very weak Q4, as activity may have been pushed into Q1 given capacity constraints. Q1 is also likely to benefit from surging immigration. The national accounts are not published on a regional basis and so it will be difficult to ascertain the impact of extreme weather events at the start of the year.
• Forecasts range from +0.4% q/q to -0.4% q/q with the annual rate varying from 2.2% y/y to 2.9% y/y. Westpac expects -0.4% q/q, BNZ -0.2%, Kiwibank 0%, ASB +0.1% and ANZ +0.2%.