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New Zealand’s economy shrank in the first three months of the year, Latest data It shows that gross domestic product (GDP) has fallen 0.2%.
Statistics New Zealand revealed that the primary industry led the decline in GDP, down 1.2% compared to the March quarter. The goods production industry also fell 0.1%.
“Food, beverage and tobacco manufacturing production has declined,” said Ruvani Ratnayake, Senior Manager of Statistics New Zealand, Agriculture, Forestry and Fisheries.
“These declines corresponded to the decline in related export categories, including dairy products. Meat products; agricultural and marine products; and other food, beverage and tobacco products.”
Exports fell 14.3% and increased 1.9% annually in the quarter, while imports decreased 2.8% and increased 17.3% annually.
The service industry, which accounts for two-thirds of the economy, showed various results but remained flat overall.
“The service industry produced a variety of results in the March 2022 quarter. Education has improved as early daycare centers can be reopened to more capacity, but retail and transportation support services. Activity has traditionally diminished during the peak of New Zealand’s tourist season, “says Ratnayake.
The results were worse than the banking industry’s forecast of flattening and significantly worse than the Reserve Bank of New Zealand’s forecast of a 0.7% increase.
The March quarter was characterized by Omicron, the start of border deregulation, Russia’s invasion of Ukraine, and the rapidly accelerating cost of living and inflation.
Michael Gordon, Deputy Chief Economist at Westpac Bank, said that despite the relaxation of official restrictions, many during the period imposed decisive restrictions on themselves according to Omicron.
“People were vigilant and away from retail space. The surge in infections meant that worker absenteeism turned out to be a major headache for many businesses,” he said. rice field.
Treasury Minister Grant Robertson said a decline in GDP is a sign of a “very difficult” global period.
“We are dependent on exports and it is clear that that is the biggest impact of the quarter,” he told 1News.
Robertson said it is “incredibly difficult” to predict whether it is a sign of a recession, which is defined as negative growth in GDP for the second consecutive quarter.
Opposition said the data is “worse news” for those who are already suffering from the cost of living crisis.
“The risks to families and businesses are serious. The government must face the reality of New Zealand’s economic situation head-on, deal with inflation and plan to drive productive growth,” he said.
ACT New Zealand leader David Seymour said GDP figures indicate that the country is “on the road to recession.”
“The Prime Minister intends to spend a very long time saying it’s all a global headwind, but that’s just a spin. Australia’s economy grew 0.8% over the same period, he said in a statement. And it’s an annual improvement of 4% over New Zealand. “
Annual GDP growth continues to be positive, up 5.1% compared to the same quarter in 2021.
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Rebecca Zhu is based in Sydney. She focuses on Australian and New Zealand national affairs. Do you have a hint? Contact her at [email protected].
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