New Zealand GDP

New Zealand

New Zealand: GDP growth accelerates in Q2; remains modest

September 17, 2015

In the second quarter of 2015, GDP increased a seasonally-adjusted 0.4% over the previous quarter, which marked an acceleration over the 0.2% expansion observed in Q1. The print slightly undershot market expectations of a 0.5% increase. Compared to the same quarter of the previous year, GDP increased 2.4% in Q2, which marked the softest increase since Q4 2013 (Q1: +2.7% year-on-year).

Q2’s acceleration was mainly driven by significant improvements in agriculture and mining. Goods producing industries increased from Q1’s 0.2% rise to a 0.4% growth in Q2. Manufacturing industries contracted 0.5% in Q2 (Q1: -1.1% quarter-on-quarter) and construction activities decelerated from Q1’s 2.2% rise to a 0.8% increase in Q2. Electricity, gas and water rose 2.4% in Q2 (Q1: 0.6% qoq). Growth in services slowed from 0.7% in Q1 to 0.5% in Q2.

On an expenditure basis, GDP grew 0.2% over the previous period in Q2, which was below Q1’s 0.3% expansion and marked the lowest value since Q4 2013. The print reflected a weaker performance in the external sector. Total consumption grew 0.9% over the previous quarter, which was above Q1’s 0.5%. Private consumption rose 0.9% (Q1: 0.2%) and government consumption grew 1.0% (Q1: 1.2%). Fixed investment recovered from its 1.8% fall recorded in Q1 and grew 1.7% in Q2. However, the external sector deteriorated as exports swung from a 1.6% increase to a 1.1% fall in Q2. Imports grew 2.3% (Q1: +0.7% qoq). Consequently, the external sector’s net contribution to overall economic growth fell from 0.2 percentage points in Q1 to minus 1.1 percentage points in Q2.

FocusEconomics Consensus Forecast panelists expect the economy to grow 2.9% in 2015, which is unchanged from last month’s forecast. For 2016, the panel sees the economy expanding 2.5%.


Author:, Economist

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