Economy grows solidly in September year

New Zealand’s economy remains one of the fastest growing in the developed world, confirming that the Government’s economic programme is taking New Zealand in the right direction, Finance Minister Bill English says.

Statistics New Zealand today reported gross domestic product expanded by 1.0 per cent in the September quarter. This took annual growth - from the September quarter 2013 to the September quarter 2014 - to a revised 3.2 per cent. This is the same as annual growth to June 2014, and equals the highest annual growth rate since September 2007. Average annual growth was 2.9 per cent.

“We are in the unusual but encouraging situation where we have solid economic growth, more employment and higher wages, but few pressures on inflation,” Mr English says. “This suggests New Zealand’s economic growth potential before inflation sets in - essentially the speed limit of the economy - is higher than expected previously.

“Although lower inflation, and the consequent lower tax revenue, is making it more challenging for the Government to return to surplus this year, it is good for businesses and families who are facing lower price increases than would normally be expected at this point in the economic cycle.

“Strong economic growth benefits all New Zealanders. Around 72,000 jobs have been created in the past year, and the average full-time wage is forecast to rise by $8,000 to around $64,000 by mid-2019. But long-term improvement in New Zealanders’ fortunes will occur only if we stick with our successful economic programme,” Mr English says.

Growth in the latest quarter was driven by agriculture (up 4.7 per cent), mining (8 per cent) and manufacturing (2 per cent).

New Zealand’s 3.2 per cent GDP growth in the year to September compares with 2.7 per cent in Australia, 3.0 per cent in the United Kingdom, 2.4 per cent in the United States, 2.6 per cent in Canada, 1.2 per cent Germany, and a 1.2 per cent decline in Japan. Average growth across the OECD was 1.7 per cent.