New Zealand emerges from recession, but economic problems persist | Business and Economics

Gross domestic product grew by 0.2 percent in the first quarter, boosted by record immigration.

New Zealand’s economy has emerged from recession after an 18-month period of recession.

Gross domestic product (GDP) grew 0.2 percent in the first three months of the year, after contracting 0.1 percent in the previous quarter, official figures showed on Thursday.

Although better than expected, the rise was greeted with little fanfare, largely driven by population growth due to record-high immigration.

On a per capita basis, GDP fell 0.3 percent in the first quarter, the sixth consecutive decline.

„The growth numbers mask weakness,” Craig Rennie, economist and policy director at the New Zealand Council of Trade Unions, said in a post on X.

Finance Minister Nicola Willis said New Zealanders were feeling the „long shadow” of higher inflation and higher borrowing costs.

„I know how difficult it is for people who are still struggling with the current cost of living crisis. We have a plan to turn things around,” Willis said, pointing to the need for „careful government spending” and „lower taxes for hard-working New Zealanders”.

New Zealand’s economy has struggled to grow since the Covid-19 pandemic, which has taken a particularly heavy toll on the country’s key agriculture and tourism sectors.

New Zealand’s Reserve Bank has raised interest rates to a 14-year high in an effort to curb hyperinflation in developed countries, halting economic activity.

Prime Minister Christopher Lacson’s centre-right coalition unveiled a budget last month that proposed tax cuts of $14.7bn New Zealand dollars ($9bn) over the next four years.

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