GDP result good news for Government

Stats NZ says growth across 15 of the 16 industries contributed to the largest quarter-on-quarter...
Stats NZ says growth across 15 of the 16 industries contributed to the largest quarter-on-quarter increase in two years. Photo: NZ Herald

The New Zealand economy grew by 1.0% over the June quarter, making for a 2.7% gain over the June year, Statistics NZ says.

The outcome compares with a Reserve Bank forecast of a 0.5% gain in Gross Domestic Product (GDP) over the June quarter, and market expectations of a 0.8% quarterly increase.

The NZ dollar increased as a result.

Stats NZ said today that growth across 15 of the 16 industries contributed to the largest quarter-on-quarter increase in two years.

A 1.0% increase in the service industries was the biggest contributor to growth this quarter, it said.

The goods-producing industries were up 0.9% following a flat March 2018 quarter.

The primary industries grew 0.2%, with strong growth in agriculture, forestry, and fishing offset by a significant fall in mining, it said.

The report follows a series of business of confidence surveys that have pointed a slight cooling of the economy.

In last month's monetary policy statement, Reserve Bank Governor Adrian Orr said the bank expected to keep its official cash rate steady at 1.75 % through 2019 and into 2020 - longer than the bank had projected in May.

Orr said then that while recent economic growth had moderated, the bank expects it to pick up pace over the rest of this year and be maintained through 2019.

The New Zealand dollar bumped up to US66.4c from US66.06 just before the release of Thursday's data.

The release of the latest GDP figures were preceded by some controversy earlier this week when Prime Minister Jacinda Ardern suggested on Newstalk ZB that she had been given a "hint" of the figures ahead of the release.

Government Statistician Liz MacPherson said at the time there are "absolutely not" any hints to anyone, including the Prime Minister, before the release of economic growth figures from Stats NZ.

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