NZ economy loses momentum

The Herald reports:

Following the release of GDP figures showing slower-than-expected growth, economists estimate near-term growth will remain subdued.

Gross domestic product expanded 0.6 percent in the three months to Dec. 31, versus a 0.6 percent expansion in the third quarter, and was 2.9 percent higher on the year, Statistics New Zealand said. Economists expected GDP expanded 0.8 percent in the quarter and 3.1 percent on the year, according to the median in a Bloomberg poll.

The New Zealand dollar was trading at 73.08 US cents as at 11:55 am, from 73.30 cents immediately before the release.

The weaker result was largely because unfavourable weather weighed on agricultural output, offsetting strong services activity. Agricultural activity shrank 2.7 percent in the period, having expanded 1 percent in the September quarter. Activity in the services industries – which accounts for about 66 percent of GDP – grew 1.1 percent in the quarter versus a 0.6 percent increase in the September quarter.

Westpac Bank senior economist Michael Gordon said the economy “appears to have lost some momentum over the course of the last year (barring any future revisions to the GDP data),” and noted that annual growth peaked at 4 percent in 2016 but slowed to 2.9 percent in 2017.

Hopefully the momentum is regained in 2018. Higher GDP generally means higher wages and more people working.