(Bloomberg) — New Zealand’s economy grew less than economists expected in the final three months of 2021 as it bounced back from a contraction caused by a lockdown in largest city Auckland.
Gross domestic product rose 3% from the third quarter, when it fell a revised 3.6%, Statistics New Zealand said Thursday in Wellington. Economists anticipated a 3.3% increase. From a year ago, the economy expanded 3.1%.
The slightly weaker than expected recovery is unlikely to derail expectations for more interest-rate hikes as price pressures build. While an omicron wave has taken hold and there is global geopolitical uncertainty, the Reserve Bank has signaled it needs to tighten monetary policy further amid expectations that inflation will exceed 7%.
The New Zealand dollar was little changed after the data. It bought 68.32 U.S. cents at 10:49 a.m. in Wellington.
While the RBNZ is optimistic the economy will continue to expand steadily, bank economists are more cautious as borrowing costs increase and the housing market slows. In the near-term, omicron cases have soared and customer-facing industries such as retailing and hospitality face dwindling sales as more people isolate or work from home.
The government this week reduced fuel taxes to temper the impact of soaring gasoline prices after Russia’s invasion of Ukraine. Consumer spending may also be bolstered by a social assistance package for lower income families taking effect on April 1.
Prime Minister Jacinda Ardern yesterday announced the re-opening of the border to foreign visitors from April 12, which will help to revive the ailing tourism industry.
The RBNZ last month increased the official cash rate to 1% and signaled it will tighten more than it previously expected. Inflation surged to 5.9% in the fourth quarter and is tipped by some banks to exceed 7% this quarter, while the unemployment rate has dropped to 3.2% and is projected to fall further.
OTTAWA – Statistics Canada says the country’s merchandise trade deficit narrowed to $1.3 billion in September as imports fell more than exports.
The result compared with a revised deficit of $1.5 billion for August. The initial estimate for August released last month had shown a deficit of $1.1 billion.
Statistics Canada says the results for September came as total exports edged down 0.1 per cent to $63.9 billion.
Exports of metal and non-metallic mineral products fell 5.4 per cent as exports of unwrought gold, silver, and platinum group metals, and their alloys, decreased 15.4 per cent. Exports of energy products dropped 2.6 per cent as lower prices weighed on crude oil exports.
Meanwhile, imports for September fell 0.4 per cent to $65.1 billion as imports of metal and non-metallic mineral products dropped 12.7 per cent.
In volume terms, total exports rose 1.4 per cent in September while total imports were essentially unchanged in September.
This report by The Canadian Press was first published Nov. 5, 2024.
