Statistics New Zealand released data revealing that the national GDP of New Zealand fell into the red during the December quarter, possibly indicating the onset of a recession. This follows Reserve Bank of New Zealand Governor Adrian Orr’s admission that a recession was being engineered to tackle inflation. The economy contracted by 0.6% during the last quarter of 2022, much worse than the RBNZ’s forecast of 0.7% growth. The decline in the manufacturing sector was the biggest driver of the decrease. Investment, government spending, and overseas visitors also contributed to the downward trend. Despite the situation, Finance Minister Grant Robertson remains positive about the economy’s “resilience,” while National’s finance spokesperson Nicola Willis is concerned. ASB Bank economist Nathaniel Keall suggests that the economy could be in recession already, while ANZ senior economist Miles Workman noted that the latest GDP figure overstates the pace of the economy’s downturn. Additionally, New Zealand’s current accounts deficit widened to the largest deficit on record, reaching 8.9% of GDP. Workman urges New Zealand to reduce spending to avoid a sharp adjustment.
NZ economy on brink of a recession, reports stats bureau.
