Global challenges reflected in March quarter GDP

The volatile global situation has been reflected in today’s quarterly GDP figures, although strong annual growth shows New Zealand is still well positioned to deal with the challenging global environment, Grant Robertson said.

GDP fell 0.2 percent in the March quarter, as the global economic trends caused exports to fall 14.3 percent compared to the December quarter. However, on an annual basis economic activity was 5.1 percent higher than the previous year.

“While the domestic economy is resilient and the annual GDP figure is strong, we know many New Zealanders are struggling with higher prices. This is why we have reduced Fuel Excise Duty, Road User Charges and halved public transport fares, as well as introducing a temporary, targeted cost of living payment.

“On April 1, we also increased main benefits, student support, New Zealand Superannuation, Working for Families and lifted the minimum wage. The Winter Energy Payment also kicked in last month.

“Unemployment is at a record low and we are in a strong fiscal position. The easing of border restrictions and opening up to skilled workers and tourists will help business and the economy rebuild.

“Exports are still 1.9 percent up on a year ago, so the March quarter fall shows just how volatile the global situation is. New Zealand was still in the red setting of the COVID Protection Framework for most of the March quarter which also affected the quarterly result. While outward facing sectors have been hit by the global situation, domestic activity in areas like construction was up,” Grant Robertson said.

Gross National Expenditure was up 2.6 percent during the quarter. This excludes the impact of imports and exports on GDP and is a measure of spending by businesses, households and Government investment.

“These results show why it is really important that we have one of lowest net debt positions in the world, giving us room to support New Zealanders through this global uncertainty.

“Our focus remains on controlling spending and targeting support to where it is needed most.

“We are keeping debt in check and making important investments in our future to deliver a high wage, low emissions economy that provides greater security in good times and bad,” Grant Robertson said.