WELLINGTON- New Zealand’s economy saw surprisingly strong growth in the third quarter, fuelling expectations the central bank will continue its aggressive rate hiking cycle as it tries to get inflation at three-decade highs under control.
While growth in the quarter was broad-based with tourism, construction and transport leading the way, signs of an impending slowdown caused by high interest rates and falling housing prices are starting to appear.
Both the country’s Treasury and central bank expect the country to move into a recession in the second quarter of next year.
Official data out on Thursday showed gross domestic product (GDP) rose 2.0 percent in the September quarter, more than double forecasts for a 0.9 percent gain and improving on the revised 1.9 percent rise seen in the second quarter. Annual growth jumped to 6.4 percent – in part due to the influence of various lockdowns on growth in New Zealand in 2021.
There was no market reaction to the GDP data with the New Zealand dollar trading largely steady at $0.6454. — Reuters
