New Zealand’s economy demonstrated stronger-than-expected growth in the first quarter of the year, reinforcing its recovery from last year’s recession. According to Statistics New Zealand, the Gross Domestic Product (GDP) increased by 0.8% in the March quarter compared to the previous three months. This figure surpassed analysts’ predictions of a 0.7% rise and the Reserve Bank of New Zealand’s forecast of 0.4% growth. The previous quarter’s growth was revised down to 0.5% from 0.7%.\nThis positive trend offers some reassurance to policymakers who are focused on stabilizing the economy after it experienced a technical recession last year, marking the worst downturn since 1991, excluding the pandemic period. Westpac senior economist Michael Gordon noted that the earlier-than-expected recovery might allow the Reserve Bank to pause and evaluate the situation during its July cash rate review. On an annual basis, GDP fell by 0.7%, slightly better than the anticipated 0.8% decline.\nThe central bank has reduced the official cash rate by 225 basis points since August 2024, bringing it to 3.25%. Further cuts are anticipated due to risks from global trade disputes. The New Zealand dollar remained stable at $0.6028 following the data release. Statistics New Zealand highlighted that nine out of 16 industries saw growth, particularly in business services and manufacturing, while arts, recreation services, and information, media, and telecommunications experienced the largest declines.\n— new from Reuters
