The economy has continued to show its resilience despite today’s GDP figures showing a modest decline in the December quarter, leaving the Government well positioned to help New Zealanders face cost of living pressures in a challenging global environment.
“The economy had grown strongly in the two quarters before this result. While GDP is likely to move around a bit as we continue to recover from Covid, our economy is 6.7 percent bigger than before the start of the pandemic, ahead of most countries we compare ourselves with,” Grant Robertson said.
GDP declined 0.6 percent in the December quarter following an increase of 1.7 percent in the previous September quarter and 1.6 percent in June. On an annual basis, economic activity was 2.2 percent higher than the same period a year earlier.
“2023 was always going to be a challenging year. The global economy is volatile and still recovering from Covid impacts.
“This result shows the strength of the economy in this challenging environment. We are well-positioned to support New Zealanders dealing with cost of living and the impact of flooding and cyclones with near record low unemployment, rising tourist numbers and the Government’s books in solid shape.
“The impact of the recent extreme weather is projected to affect activity in the current March quarter. But after that, the Reserve Bank is forecasting the rebuild will add about 1 percent to GDP over the next couple of years.
“The Treasury and the Reserve Bank have previously forecast that a period of period of high inflation is set to be followed by a shallow recession. In the face of this we will continue to focus on supporting New Zealanders with cost of living pressures while carefully and responsibly managing the Government’s finances.
“Today’s data shows central government consumption fell 2.8 percent in the December quarter and the Treasury has already noted that the Government’s fiscal policies are helping reduce inflation pressures,” Grant Robertson said.
“We will continue to take a balance approach that includes investing in the strong public services that New Zealanders need, in hospitals, schools and housing. We will address climate change, with a focus on adaptation as the extreme weather events that we have experienced become more frequent.
“These are challenging times for many New Zealanders but our economy is resilient and we are building an economy for the long term that delivers higher wage jobs and low emissions that makes our families and businesses stronger in good times and bad,” Grant Robertson said.