Encouraging signs in latest GDP data

The latest GDP data has encouraging signs for the New Zealand economy, which continues to show solid growth.

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The latest GDP data has encouraging signs for the New Zealand economy, which continues to show solid growth, Acting Finance Minister Trevor Mallard said today.

GDP grew by 0.7 per cent in the June Quarter and 2.2 per cent for the year ended June 2007 according to Statistics New Zealand. Growth in the quarter was higher than the market median expectation, driven mainly by a build-up of inventories on the expenditure side and services on the production side.

"We are effectively at full employment, which is great news for the financial security of New Zealanders. This means businesses will look more towards capital investment. On an annual basis, investment in plant, machinery and equipment was up 2.9 per cent in the year ended June 2007.That should have positive flow-on effects for our productivity," said Trevor Mallard.

"The data also shows household consumption growth starting to weaken. We need to see this trend continue. That's why Budget 2007 focused on encouraging saving and investing.

"Another positive from the data is that New Zealand exports have done surprisingly well despite the high kiwi dollar. Manufacturing experienced its second successive quarterly increase, up 0.5 per cent in the June 2007 Quarter following a 1.1 per cent increase in the March Quarter.

"Our GDP performance reinforces that under the stewardship of the Labour-led government, New Zealand is experiencing its longest period of economic expansion in a generation."