Economy

New Zealand: Economy slips into recession after interest rate hikes

Published

1 year ago

June 14, 2023

Houses at Oriental Bay in Wellington, New Zealand.

New Zealand’s economy has fallen into a recession after the country’s central bank aggressively raised interest rates to a 14-year high.

Its gross domestic product (GDP) fell by 0.1% in the first three months of the year, official figures show.

That followed a 0.7% contraction in the previous quarter, which means the economy is in a “technical recession”.

The Reserve Bank of New Zealand (RBNZ) has increased the cost of borrowing sharply since October 2021.

New Zealand was one of the first countries to start raising rates in the wake of the pandemic and has outpaced the US Federal Reserve. Last month, the RBNZ increased its main interest rate to 5.5%.

Many New Zealanders, who were already facing rising prices, are now feeling the impact of higher rates as mortgage repayments and the cost of other loans jump.

“Interest rates are crippling,” David Jordan, an Auckland-based web engineer told the BBC.

“I have seen many job losses in my industry as start-ups try to save money, though consultancies working with big global firms seem to be faring better,” he added.

Central banks around the world increased the cost of borrowing as they tried to curb price rises that were triggered as economies opened up after the Covid lockdowns.

Inflation was also driven higher by the rising cost of everything from fuel to food, due to the Ukraine war.

In the first three months of this year, New Zealand’s economy was also impacted by Cyclones Hale and Gabrielle and teachers’ strikes.

“The adverse weather events caused by the cyclones contributed to falls in horticulture and transport support services, as well as disrupted education services,” Jason Attewell, economic and environmental insights general manager at Statistics New Zealand said in a statement.

A technical recession is defined by an economy shrinking for three-month periods, or quarters, in a row.

Earlier, the RBNZ signalled that it had no further plans for further hikes. The contraction adds to expectations that the central bank will not raise rates again in the foreseeable future.

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Economy

S&P/TSX composite gains almost 100 points, U.S. stock markets also higher

Published

2 days ago

September 13, 2024

Anne Joseph

TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.

The S&P/TSX composite index closed up 93.51 points at 23,568.65.

In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.

The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.

The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.

The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.

This report by The Canadian Press was first published Sept. 13, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

Statistics Canada reports wholesale sales higher in July

Published

3 days ago

September 13, 2024

Anne Joseph

OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.

The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.

The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.

The personal and household goods subsector fell 2.5 per cent to $12.1 billion.

In volume terms, overall wholesale sales rose 0.5 per cent in July.

Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.

This report by The Canadian Press was first published Sept. 13, 2024.

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Economy

S&P/TSX composite up more than 150 points, U.S. stock markets mixed

Published

4 days ago

September 12, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 172.18 points at 23,383.35.

In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.

The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.

The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.

The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.

This report by The Canadian Press was first published Sept. 12, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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