Economy

New Zealand economy contracts 1.6% in March quarter, biggest decline in three decades – Financial Post

Published

4 years ago

June 17, 2020

WELLINGTON — New Zealand’s gross domestic product (GDP) fell 1.6% in the March quarter, the largest drop in 29 years and the first quarterly fall since the December 2010, as the initial effects of COVID-19 restrictions sapped economic activity.

The contraction was worse than forecasts of economists polled by Reuters who had expected the economy to contract 1.0% in the March quarter from the previous three month period.

“The 1.6% fall surpassed quarterly falls during the global financial crisis in the late 2000s,” national accounts senior manager Paul Pascoe said.

It was the largest quarterly fall since the 2.4% decline in the March 1991 quarter.

Annual production-based GDP fell 0.2% compared to a 0.3% rise forecast in the Reuters poll. Economists have warned the data may not fully capture the extent of economic impact due to COIVD-19, as a lockdown to limit the spread of the coronavirus was only enforced by the end of the first quarter.

“With only one week of New Zealand’s lockdown falling in Q1, we expect things to get much worse in Q2,” said Ben Udy, economist at Capital Economics.

New Zealand is among a handful of countries that has emerged out of the coronavirus pandemic, largely due to its strict lockdown that forced almost everyone to stay at home and all but essential businesses to shut.

All restrictions, except border controls, were lifted last week, but the tough measures brought the economy to a standstill for weeks.

The New Zealand dollar had little reaction to the data, and was down 0.1% at $0.6449.

Service industries contributed the most to the drop in activity, while the construction industry and household consumption expenditure also fell.

The Reserve Bank of New Zealand (RBNZ) is widely expected to hold interest rates at its meeting on June 24, as it continues with its NZ$60 billion ($39 billion) quantitative easing (QE) program to stimulate the economy. (Reporting by Praveen Menon; Editing by Sandra Maler and Lincoln Feast.)

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Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

Published

21 hours ago

October 17, 2024

Anne Joseph

OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

Published

2 days ago

October 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

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Economy

Statistics Canada says manufacturing sales fell 1.3% to $69.4B in August

Published

2 days ago

October 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.

The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.

The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.

Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.

Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.

Overall manufacturing sales in constant dollars fell 0.8 per cent in August.

This report by The Canadian Press was first published Oct. 16, 2024.

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