Economy grows more strongly in March quarter

The economy grew more strongly than expected in the March quarter, despite ongoing economic and financial market uncertainty in other parts of the world, Finance Minister Bill English says.

The 1.1 per cent quarterly increase in Gross Domestic Product took annual growth to 2.4 per cent compared to March 2011, which is better than growth in most other developed countries.

“We are likely to see fluctuations in growth from quarter to quarter, as households and businesses get used to building their incomes around higher savings and earnings, rather than consumption and debt,” Mr English says.

“Today’s numbers confirm moderate underlying strength in the economy, despite the uncertain international mood and difficulties in Europe in particular.”

GDP growth in the March quarter was reasonably broad-based, including manufacturing, business services and agriculture.

“The economy has grown in 10 of the past 11 quarters, after taking account of recent data revisions, since emerging from the recession which started in New Zealand in early 2008,” Mr English says.

“What’s important for the Government is taking a long-term view of building New Zealand’s competitiveness and productivity, which will help us deal with headwinds from the uncertain global environment. That is the focus of our economic plan.”