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New Zealand GDP Q4 2021

New Zealand: The economy rebounds in Q4 due to the easing of lockdowns

GDP increased 3.0% in seasonally-adjusted quarter-on-quarter terms in Q4, amid the easing of Covid-19 restrictions. The result, which followed Q3’s 3.6% slump, somewhat undershot market expectations. Meanwhile, on an annual basis, GDP expanded 3.1% in Q4, contrasting Q3’s 0.2% dip.

The quarterly upturn came on the back of a marked rebound in household spending. Private consumption jumped 5.1% (Q3: -7.2% s.a. qoq), while fixed investment soared 11.1% in Q4 (Q3: -5.6% s.a. qoq). Moreover, government spending growth gained steam (Q4: +5.0% s.a. qoq; Q3: +1.8% s.a. qoq).

Meanwhile, exports fell at a softer rate of 1.7% in Q4 (Q3: -4.7% s.a. qoq), while imports expanded 3.6% in the quarter, after increasing 5.2% in Q3.

Commenting on the short-term economic outlook, Jonathan Koh and Edward Lee, economists at Standard Chartered, stated:

“The latest Covid-19 outbreak is the country’s worst to date, although it appears to be peaking at [approximately] 20,000 daily cases–50 times the previous peak of [approximately] 400 daily cases in November. The recent weakening of sentiment indicators may largely be attributable to the Omicron outbreak. However, we are also cautious about the impact on sentiment from tighter monetary conditions.”

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