Thursday’s numbers show whether NZ may have entered recession sooner than expected.
All five major banks are forecasting GDP numbers due to be released by Stats NZ on Thursday, showing the economy has contracted in the last three months of last year.
If that’s true, the economy could already be in the recession that the Reserve Bank predicted for the rest of the year for nearly half a year.
The Reserve Bank estimated last month that quarterly GDP grew by 0.7% in the December quarter, down from a very strong growth of 2% in the previous quarter.
However, both ANZ and Kiwibank forecast that Stats NZ will instead report a decline in economic activity of around 0.3%, while ASB forecasts a decline of 0.5%.
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BNZ and Westpac are forecasting a 0.2% drop, but BNZ overturned estimates of a slight gain on Monday.
ANZ senior economist Myles Workman said seasonally adjusted economic activity is expected to rise in 2020 as international tourist numbers are still down about 32% from pre-pandemic levels in December and house prices are receding. Being active all year round “simply won’t pass the smell test,” he said. quarter.
Bruce McKay / STUFF
Reserve Bank Deputy Governor Christian Hawksby talks about what Cyclone Gabriel means for the economy.
Kiwibank senior economist Mary Jo Vergara said a range of economic indicators, from construction estimates to manufacturing sales to retail figures, showed weak activity.
Reserve Bank forecasts show the economy will enter a shallow recession in January.
However, in New Zealand, a recession is defined as two consecutive quarters of falling GDP, so it was not confirmed until Stats NZ reported its June quarter GDP figures on 21 September, less than four weeks after the election. I could not do it.
On the other hand, if Stats NZ reports a decline in GDP in the December quarter, a recession could be confirmed on June 15th.
BNZ had expected GDP to grow by 0.3% in the December quarter before revising its forecast.
ASB economist Nathaniel Kiel predicted that Cyclone Gabriel would have a “very uneven” impact on the economy, but as repairs progressed and consumers replaced damaged property, “Gabriel We expected a recovery afterward to boost growth in the short term.