Worsening forecasts have prompted New Zealand economists to revise down their expectations for the Kiwi economic system, forward of GDP figures being launched.
Market sentiment is for Stats NZ to disclose a gentle contraction in This fall 2022 when the federal government physique releases information on Thursday.
And in that case, that spells unhealthy news for the New Zealand authorities, which can struggle an election marketing campaign with an economic system in recession.
The New Zealand economic system has proven its resilience by way of COVID-19, stunning all-comers with 2.0 per cent development in Q3 and 1.9 per cent development in Q2 final 12 months.
However, the rebound is predicted to grind to a halt within the December quarter figures, with market consensus for a 0.2 per cent contraction.
“In some senses that’s not surprising given where we’re coming off a two per cent growth in the September quarter. It’s quite hard to keep up that level of growth,” Finance Minister Grant Robertson stated.
Kiwibank senior economist Mary Jo Vergara stated the Reserve Bank’s work to boost the official money price – with the steepest hikes on file in This fall final 12 months – would inevitably sluggish the economic system.
“The December report card is largely a story of payback. However, it foreshadows what we might see later this year,” she stated.
“Our base case scenario still sees Aotearoa enter a shallow recession this year. It’s a direct result of the RBNZ’s hawkish policy actions.”
Both the Reserve Bank and Treasury predict a recession for New Zealand in 2023 – however each additionally tipped constructive This fall leads to earlier forecasts.
Should Stats NZ report a contraction on Thursday, it could imply its subsequent launch – in June – may verify a recession, as outlined as two consecutive quarters of adverse development.
Opposition finance spokeswoman Nicola Willis stated the real-world expertise of Kiwi employees and companies was certainly one of issue.
“They are doing it really tough. Wages aren’t keeping up with inflation. It’s still very hard to get workers,” she stated.
“Lots of businesses are very worried about the future and we’ve got an economy that is not delivering gains for everyday people.”
Also on Wednesday, Stats NZ launched information displaying New Zealand’s present account deficit had widened to its largest ever level.
New Zealand imported $NZ33.9 billion ($A31.5 billion) greater than it exported in 2022, or 8.9 per cent of its GDP, up from $NZ21.2 billion ($A19.7 billion) in 2021.
Mr Robertson stated COVID-specific circumstances had been guilty, pointing to forecasts it could come down.
“We didn’t have the borders open from a tourism perspective (and)the price of imported goods is very high largely as a result of COVID,” he stated.
The largest earlier hole was 7.8 per cent of GDP, measured in 2008 through the international monetary disaster.
Source: www.perthnow.com.au
