MNI BRIEF: NZ Q3 GDP Up 2% Q/Q; Beats RBNZ's November Forecast

New Zealand's economy grew at 2% q/q pace in the third quarter, though a dip in private consumption hints at softer growth ahead after 400bp of cumulative rate hikes by the Reserve Bank of New Zealand.

Third quarter growth exceeded consensus forecasts for 0.9% growth and surpassed the RBNZ's estimate of 0.8% growth contained in November's Monetary Policy Statement. It is expected growth will slow in 2023, with the RBNZ forecasting four quarters of negative growth starting from Q2. The New Zealand Treasury earlier this week forecast growth would contract over the June, September and December quarters next year, delivering a contraction in growth of 0.3% by June 2024. (See MNI BRIEF: NZ Govt Forecasts Recession, CPI Miss Until 2024)

Service industries drove the strong increase in GDP, notably transport and healthcare. However, private consumption fell 0.1% q/q as households feel the brunt of elevated inflation and higher interest rates.