June 19, 2024 23:25 GMT
Q1 Growth Soft But Improving, In Line With RBNZ Forecast
NEW ZEALAND
NZ Q1 GDP came in above expectations rising 0.2% q/q to be up 0.3% y/y after falling 0.1% q/q and 0.2% y/y. It remains weak and fell 0.3% q/q and 2.4% y/y per person. It has returned to positive territory though ending the technical recession. It was in line with the RBNZ’s forecast and so is unlikely to change the MPC’s wait-and-see stance. It expects growth to continue to improve with H2 around 0.4% q/q.
NZ GDP (production) %
Source: MNI - Market News/Refinitiv
- Expenditure-based GDP was soft on the quarter rising 0.1% q/q but is up 0.5% y/y after recording another 0.1% q/q rise in Q4. Q1 was driven by strong private consumption growth and a build in inventories. Whereas net exports, government spending and investment were negative.
- Private consumption rose 1.6% q/q contributing 1pp to GDP growth. It is now up 1.3% y/y after 0.2%. Whereas investment fell 1.3% q/q with the weakness broad-based but residential building down 3.7%. Imports rose 6.1% q/q which added to inventories. But it outpaced exports resulting in a net export drag of 2pp in Q1 after a 1.7pp contribution in Q4.
NZ domestic demand y/y%
Source: MNI - Market News/Refinitiv
- Statistics NZ observes that half the industries it covers saw positive growth in Q1 with electricity generation and hiring & real estate services particularly strong, whereas construction, manufacturing and business services fell.
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