NZ GDP: Cooling gradually – ANZ

The NZ economy expanded by 0.5% q/q in Q1, in line with consensus expectations and is a more modest pace of growth than the 0.6% pace recorded in Q4 and the strong rates of growth seen since 2014 (0.9% q/q on average), according to Liz Kendall, Senior Economist at ANZ.

Key Quotes

“Annual growth moderated from 2.9% y/y to 2.7% y/y.”

“Economic momentum continues to slow gradually, consistent with recent lacklustre data flow. The underlying picture is weaker than the headline suggests. In per capita terms, GDP has stalled, at 0.0% q/q (0.6% y/y).”

“On the production side, 13 of the 16 industries recorded stronger levels of activity.”

“Expenditure GDP rose a more modest 0.3% q/q.”

“Consumption was flat in the quarter (3.8% y/y), despite strong population growth.”

“Gross fixed capital investment increased 0.7% q/q (3.9% y/y).”

“Nominal GDP fell 0.4% q/q, but is running at 6.0% annually. Real gross national disposable income rose 0.1% q/q (3.4% y/y) pace.”

“We don’t think the cycle is out in the cold just yet. The economy is in the midst of headwinds, but it is also flexible and resilient.”

“It is fair to say that downside risks to the outlook have increased a little of late. And with the economy expected to grow around trend, this is of particular relevance for the RBNZ.”