In the third quarter of 2019, New Zealand’s GDP rose by more than many analysts predicted. In the three months to the end of September, the economy rose by 0.7 per cent. ASB accurately predicted a 0.7 per cent increase, but the Reserve Bank and ANZ had forecasted growth of 0.3 per cent 0.5 percent respectively.
Finance Minister Grant Robertson says this information reflects that New Zealand’s economy is healthy and showing no signs of weakness after the elections. However, National Party finance spokesman Paul Goldsmith expressed concerns that, on a per person basis, New Zealand’s economy is growing at a slower pace than the EU, the US, Japan, and many other developed nations.
Gary Dunnet, national accounts senior manager for Statistics NZ, stated that the GDP increase has been strengthened by a 0.8 per cent boost in retail spending. After being somewhat stagnant in the quarter of June, there was a 2.4 per cent growth in the retail industry as a result of strong spending on electronics. Business and customer confidence declined after Statistics NZ predicted a 0.1 to 0.5 per cent growth in the three months to the end of June.
ASB economists Nick Tuffley and Jane Turner remarked that the Reserve Bank would be relieved by the stronger-than-expected GDP growth in the September quarter and recent boost in business confidence. Nevertheless, they still think the Reserve Bank will reduce the Official Cash Rate in 2020. The rate is currently at 1 per cent.