- Hon Grant Robertson
The economy has turned a corner with confirmation today New Zealand never was in recession and stronger than expected growth in the June quarter, Finance Minister Grant Robertson said.
"The New Zealand economy is doing better than expected," Grant Robertson said.
"It's continuing to grow, with the latest figures showing no recession in New Zealand earlier this year and that the Government's actions to build a stronger and more resilient economy contributed to higher than expected growth this quarter.
"The economy expanded 0.9 percent in the June quarter. That's double economists' median forecasts of 0.4 percent and ahead of the Treasury's forecast of 0.6 percent in the Pre-Election Fiscal and Economic Update.
"Annual growth stood at 3.2 percent, with the size of the economy at $395 billion, bigger than it was pre-COVID.
"This is a very positive result with Stats NZ confirming no recession earlier in the year due to a revision of the March quarter number. The economy is now 7.7 percent bigger than at the start of the pandemic.
"The economy is turning a corner and showing its mettle in the face of a deteriorating global environment and the impact of extreme weather events," Grant Robertson said.
"New Zealand's quarterly economic growth of 0.9 percent compares favourably with the countries we compare ourselves with, with Australia at 0.4 percent, Canada at 0.0 percent, the Euro area at 0.1 percent, the UK at 0.2 percent and the US at 0.5 percent. The OECD average was 0.5 percent.
"Our economic plan is delivering a solid foundation to support New Zealanders dealing with the cost of living while investing in our recovery to build a stronger and more resilient economy.
"The services sector, which makes up two-thirds of economic activity, was the main contributor to growth, led by business services. Manufacturing activity also rose. The disruption caused by the impact of the North Island Weather Events continued to affect the farming and forestry industries.
"On the expenditure side, household spending rose 0.4 percent, led by durables such as electric vehicles, while business investment picked up and the export sector grew 5 percent. Last month, figures released showed food and fibre export revenue hit $57.4 billion in the June year, bringing $1.2 billion more into the economy than was originally forecast.
"We know this is a tough period for Kiwis dealing with the cost of living, the impact of flooding and cyclone Gabrielle on affected families and businesses and a faltering global economy.
"There are 69,000 more people in work than forecast in May's Budget, unemployment is low and wages are rising. The economy is also benefiting from a growing population, growing exports and the return of tourists and international students.
"The economy is turning a corner and outlook is positive. The Treasury is forecasting average annual growth of 2.6 percent over the forecast period, with the addition of 100,000 plus extra jobs and wages outpacing inflation.
"The Reserve Bank is indicating that interest rates have peaked and inflation is projected to fall back under control in the 1 to 3 percent target band later next year. The Government is doing its bit to help ease inflation pressures, with real government consumption forecast to fall by 0.2 percent over the forecast period.
"We are continuing to invest in building a stronger and more resilient economy. We have committed over $2.2 billion so far to support affected communities with the recovery and rebuild from the flooding and Cyclone Gabrielle. Another $6 billion is initial funding is committed for a National Resilience Fund to focus on the longer-term response, including meeting $1.7 billion in cost-sharing agreements with councils and future proofing roads and other infrastructure such as flood protection, telecommunications and electricity networks.
"We are committed to addressing climate change, with a focus on adaptation as the extreme weather events that we have experienced become more frequent, and the transition to a low carbon economy and reduce our reliance on fossil fuels.
"We are investing in an export led economy that delivers higher wage jobs. Free trade agreements now cover almost three quarters of New Zealand's exports, up from less than half six years ago. More businesses are investing in research and development, with over $5 billion in expenditure in 2022, an increase of two-thirds since 2016.
"More than 274,000 people have taken up free apprenticeships and targeted trades training. Net migration of over 96,000 is helping ease skills shortages and boost economic activity.
"We will continue to a responsible and balance approach that includes investing in the strong public services that New Zealanders want in hospitals, schools and housing while ensuring we met our fiscal goals of a surplus in the forecast period and net debt below the ceiling of 30 percent of GDP and well below those of the countries we compare ourselves with. The major ratings agencies have endorsed our economic plan and continue to have confidence in New Zealand's resilience in an uncertain global environment.
"These are challenging times for many Kiwis but our economy is turning a corner and we are building for the long term that delivers high wage jobs and low emissions that makes our families and businesses stronger in good times and bad," Grant Robertson said.
