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In the first quarter of 2024, New Zealand’s economy experienced a quarter-on-quarter expansion of 0.2%, marking a turnaround from a contraction of 0.1% in the final quarter of 2023. Such growth surpassed economists’ predictions, which had anticipated no change in economic performance during that period. The economy has shown signs of improvement, having expanded in two of the last six quarters. 

Growth was primarily propelled by notable increases in specific sectors. Utilities recorded a substantial rise of 2.9%, compared to just a 0.2% increase in the fourth quarter of 2023. The arts, recreation, and other services sectors also witnessed positive movement, registering a 0.3% increase after a 0.9% decline in the preceding quarter. Additionally, retail trade activities experienced a slight uptick of 0.2% after falling by 0.7% in the previous period. Contrastingly, the wholesale trade sector contracted by 0.3%, albeit at a slower pace than the 1.8% drop seen in the last quarter of 2023. 

Overall, the performance across various industries was mixed, with half (8 out of 16) registering expansion. Growth was especially pronounced in the rental, hiring, and real estate services sectors, as well as in the electricity, gas, water, and waste services. 

From a broader perspective, on an annual basis, New Zealand’s GDP saw an increase of 0.3%, which represented a significant recovery from a 0.3% decrease in the previous quarter. This indicates a positive, albeit slight, upward trend in the country’s economic recovery. 

(GDP Annual Growth Rate%，Statistics New Zealand) 

On Wednesday, Paul Conway, the chief economist at the Reserve Bank of New Zealand, reported notable success in steering inflation toward its target level. He pointed out that an increase in available economic capacity, due to a relaxation in the labor market, is expected to ease the pressure on inflation. However, Conway also highlighted the unpredictability of this process, suggesting it could unfold more rapidly or sluggishly than anticipated, necessitating a phase of stringent policy to achieve the desired outcome. Meanwhile, the New Zealand dollar maintained its position around $0.613, benefiting from a boost in the previous session that was triggered by a decline in the US dollar. The fall in the US currency came after disappointing US retail sales figures, which fueled speculation about impending rate cuts by the Federal Reserve. 

(NZDUSD Monthly Chart) 

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