Joe Hockey won’t welcome the comparison, but the struggling NZ economy managed to eke out a better June quarter performance than Australia did.
NZ’s Gross domestic product grew 0.4%, seasonally adjusted in the June quarter, Australia’s growth was 0.2%.
NZ’s second quarter growth was up from the weak 0.2% in the first quarter, our GDP growth slumped from the solid 0.9% quarter on quarter rate in the three months to March.
But the NZ growth figure was weaker than market forecasts for GDP growth of 0.5% and the 0.6% rate the country’s Reserve Bank had expected.
Kiwi GDP slows
On an annual basis, GDP grew 2.4%, down from a 2.7% in the year to March.
"Despite falling milk prices, we’re seeing growth in dairy production," national accounts manager Gary Dunnet said in a statement. "But over the year, agriculture is up only a little, due to dry conditions last summer."
The New Zealand dollar eased on the news.
The Reserve Bank of New Zealand has already cut its official cash rate three times in around six months to cushion the economy against the sharp slide in global dairy prices which is delivering a terms of trade shock to NZ as the fall in iron ore, coal and other commodity prices are crunching Australia’s.
The cash rate is 2.75% and the RBNZ said in its most recent statement that a further cut is on the cards. That could come in October.
At the start of the year growth was hit by a drought in the South Island, slowing dairy production (the fall in global dairy prices added to the problem), as well as a shutdown at one of New Zealand’s largest oilfields.
While both dairy and oil and gas production picked up in the June quarter, this was offset by a 1.8% fall in the transport, postal and warehousing category, due to a fall in transport activity.
