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New Zealand GDP Q4 2023

New Zealand: Economy drops at a more moderate pace in Q4

GDP dropped at a slower rate of 0.1% on a seasonally adjusted quarter-on-quarter basis in the fourth quarter, above the 0.3% contraction seen in the third quarter. On an annual basis, economic activity declined 0.3% in Q4, compared to the previous quarter’s 0.6% fall.

The quarterly upturn reflected a broad-based improvement in private consumption, public spending, fixed investment and exports.

Household spending increased 0.5% in the fourth quarter, which contrasted the third quarter’s 0.9% contraction. Public consumption, meanwhile, rebounded, growing 0.2% in Q4 (Q3: -1.7% s.a. qoq). Meanwhile, fixed investment contracted at a milder rate of 0.3% in Q4, from the 3.0% decrease recorded in the prior quarter. On the external front, exports of goods and services increased 3.2% on a seasonally adjusted quarterly basis in the fourth quarter, which was above the third quarter’s 2.4% contraction. Conversely, imports of goods and services dropped at a quicker rate of 2.9% in Q4 (Q3: -0.5% s.a. qoq).

Commenting on the outlook, UOB’s Lee Sue Ann stated:

“Recent economic data suggest that economic growth has been weaker than expected. We forecast GDP growth to remain sluggish at 0.7% in 2024. Positive factors include a turning housing market, surging net migration, and expansionary fiscal policy; while negative factors include tight monetary conditions, softer global demand, and heightened geopolitical tensions.”

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