- Economists polled by Reuters had expected New Zealand to contract 0.1% quarter-on-quarter and represent growth of 2.6% year-on-year.
- At its May meeting, the Reserve Bank of New Zealand raised its benchmark rate to the highest in 14 years, a 25-basis-point hike that lifted its official cash rate to 5.5%.
Buildings in Auckland, New Zealand on Monday, May 22, 2023.
Bloomberg | Bloomberg | Good pictures
New Zealand’s gross domestic product fell 0.1% in the first quarter, according to government data released Thursday, as its central bank embarked on one of the world’s most aggressive rate-hiking cycles.
The latest data from Wellington points to a technological slowdown in the economy Announcing a revised 0.7% decline In the last quarter of 2022.
A technical recession is defined as two consecutive quarters of contraction.
Compared to last year, the economy grew by 2.9% in the first quarter. Economists polled by Reuters had expected New Zealand to contract 0.1% quarter-on-quarter and post 2.6% annual growth.
At its May meeting, the Reserve Bank of New Zealand raised its benchmark rate to the highest in 14 years, marking a 25-basis-point hike. The official cash rate is 5.5%..
Refinitiv, Statistics New Zealand
„New Zealand’s economy is in the midst of a necessary, policy-induced slowdown following a strong post-pandemic recovery,” the International Monetary Fund said in a work report on Wednesday ahead of the GDP release.
The IMF warned against a return to central bank monetary policy easing and said the door should remain open to further rate hikes.
„Persistent non-tradable inflation makes the prospect of lowering the OCR low in the long term,” the IMF wrote.
„Adequate fiscal consolidation, and the demand regime, including stagnant inflation above target, will call for further tightening of monetary policy,” it said.
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