New Zealand GDP Q3 2018

New Zealand

New Zealand: Growth slows to a near five-year low in Q3

December 19, 2018

According to data released by the Statistical Institute, quarter-on-quarter seasonally-adjusted national accounts for the third quarter were the weakest since late 2013. Headline growth presented a 0.3% month-on-month increase, down from Q2’s 1.0% outturn, undershooting analysts’ expectations. In annual terms, the economy grew by 2.6% in Q3, decelerating from Q2’s 3.2% increase.

The third-quarter slowdown reflected a decrease in output across major industries. Goods-producing industries logged a 1.0% quarter-on-quarter fall in production (Q2: +1.5% quarter-on-quarter seasonally-adjusted), hurt by an across-the-board contraction of subcomponents. In addition, service industries reported a meager 0.5% increase in output (Q2: +1.0% qoq s.a.), mainly amid weaker gains in wholesale and retail trade, and losses in the transport sector. On a more positive note, primary industries bounced back from a quarter prior (Q3: +2.2% qoq s.a., Q2: -0.1% qoq s.a.), on the back of recovering mining activity and despite slower agricultural production.

Growth is expected to remain stable this year, as a tight labor market and moderate price pressures benefit consumer’s bottom line. Low interest rates and ample space for increased fiscal stimulus are also seen supporting near-term growth prospects. Meanwhile, the major downside risk steams from an expected slowdown in China—New Zealand’s most important trading partner—as it could bruise export gains.

FocusEconomics Consensus Forecast panelists expect the economy to grow 2.7% in 2019, unchanged from last month’s forecast and 2.5% in 2020.


Author:, Economist

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NewZealand GDP Q3 2018

Note: Year-on-year and month-on-month changes of GDP in %.
Source: Quarter-on-quarter changes of seasonally adjusted GDP in %.


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