“Growth this quarter is being driven by strong domestic and export demand”, said Statistics New Zealand’s national accounts senior manager Gary Dunnet.
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The other arm to New Zealand’s growth this year has been record levels of tourism and inbound migration, which helped lift retail trade and accommodation services activity 1.9 percent in the quarter. Economists expect another cut to 1.75 percent in the fourth quarter.
Strong global demand saw exports increase 4 per cent, with exports of goods posting its biggest quarterly increase in almost 20 years.
Over the same period, the U.S. economy grew 1.2 per cent, Japan 0.6 per cent and the Eurozone 1.6 per cent.
New Zealand’s net worldwide liability position was $163.3b, or 64.9 per cent of GDP at June 30, from $159b, or 63.9 per cent at March 31. In Australia, government figures are expected to show the jobless rate held at 5.7 percent last month while the economy added 15,000 jobs, down from 26,200 in the previous month. “Household spending was up 1.9%, with Kiwis spending more on going away, eating out, and furnishing their houses”.
On an annual basis, average growth rose to 2.8 percent. Exports of goods saw the largest quarterly increase since 1998 imports of goods and services was up 2.6 percent.
As for what this means for our hip pockets, ANZ chief economist Cameron Bagrie say any growth flows into the economy and eventually into wages.
She says talk of New Zealand being a “rockstar economy” was “the kind of language we heard before the [Global Financial Crisis]”.
Labour’s finance spokesperson Grant Robertson says everyday Kiwis won’t be feeling the benefits of GDP growth.
“The answer is because on a per person basis our economy is barely moving”. But what these numbers show is that we are not getting the increased economic value from that to mean real sustainable growth.
Economists are picking reasonably robust growth to continue, led by housing and tourism.
“With the tourism sector, the issue is not about demand”.
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Mr Tuffley warned the export surge was unlikely to be sustained, with inventories being run down, particularly in the dairy sector.
