Recession continues to hammer New Zealand’s economy, which shrank in the three months through March for a fifth consecutive quarter to record its biggest annual decline in activity in 17 years, new data showed yesterday.
Statistics New Zealand said GDP fell 1 percent in the March quarter, after a fall of 1 percent in the three months ended Dec. 31. GDP was also down 1 percent for the year ended March.
FIFTH STRAIGHT DECLINE
It’s the first time since the series began in 1986 that GDP has declined for five straight quarters.
The 1 percent declines of the December and March quarters were the largest since 1992, the government-funded statistics agency said.
Biggest contributors to the annual fall were an 8.9 percent drop in construction and a 5.4 percent fall in manufacturing, it said.
The main contributor to the March quarter fall was manufacturing, which dropped 7.2 percent.
SPENDING FALLS
Household consumption spending fell 1.4 percent in the March quarter, the biggest fall recorded since 1991.
The size of the quarterly decline in GDP caught many economists by surprise after they predicted a median 0.7 percent fall, although New Zealand’s Reserve Bank correctly predicted the 1 percent contraction.
Reserve Bank Governor Alan Bollard said recently he expected this quarter would show a further contraction, though some weak growth was likely by year end.
The central bank has slashed the official cash rate to 2.5 percent from 8.25 percent last July in a bid to halt the economy’s slide into deeper negative growth.
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