New Zealand Retail Sales (ann. var. %)

The economy surprised on the upside in Q3 2022 and posted a faster-than-expected sequential increase thanks to a recovering tourism sector, a rebound in investment and a milder contraction in household spending. The fourth quarter of last year should have registered a softer pace of expansion. Month-on-month retail payment card spending contracted, on average, in the period. Moreover, business and consumer sentiment weakened considerably compared to Q3. On top of this, the unemployment rate ticked up, and inflation remained notably elevated in Q4, boding poorly for household spending. In Q1 2023, there is room for hope: Business and consumer sentiment regained some ground in January—although they remained downbeat—and retail card spending rebounded.