Summarised by Centrist
New Zealand’s economy is in rough shape, with GDP falling 1% between July and September 2024, after already contracting by 1.1% from April to June. Economists call it the worst six-month economic period since 1991, excluding COVID.
Meanwhile, Treasury data showing National plans to borrow $118b over the next five years, echoing the $100b spree Willis lambasted Labour for during their term.
11 of 16 industries, including manufacturing, business services, and construction, reported declines. Only agriculture and real estate showed modest growth, with dairy exports helping cushion primary industries.
On a per capita basis, GDP contracted 1.2%, the eighth consecutive fall, and the economy is 2.7% smaller annually.
KiwiBank economist Mary Jo Vergara warned, “Excluding COVID periods, the past six months have been the weakest since June 1991.”
Pressure is mounting on the Reserve Bank to slash interest rates aggressively. Capital Economics predicts a possible 75 basis point cut in February, citing ongoing labour market struggles and cooling net migration.
Robert MacCulloch notes Finance Minister Nicola Willis blamed Labour’s debt spree for the country’s economic woes after the previous government’s $100b spending spree between 2018 and 2023. Yet, Treasury figures reveal National’s borrowing could reach $115b by 2028.
Read more over at The NZ Herald and Down to Earth Kiwi
