NZ maintains steady economic growth

New Zealand’s economy continues to grow steadily, maintaining one of the higher annual growth rates in the OECD, Finance Minister Bill English says.

As expected, the severe drought earlier this year slowed economic growth in the June quarter, with statistics out today showing gross domestic product grew 0.2 per cent in the three months to June 30.

However, annual growth – from the June quarter 2012 to the June quarter 2013 – remained relatively strong at 2.5 per cent. This compares with growth over the same period of 2.6 per cent in Australia, 1.6 per cent in the US, 1.4 per cent in Canada, 1.3 per cent in Japan, 1.5 per cent in the UK and -0.5 per cent in the Euro area.

“It’s pleasing that despite the worst drought in 70 years, New Zealand still achieved one of the higher annual growth rates in the OECD,” Mr English says.

“While the June quarter was affected by a fall in agricultural production - down 6.4 per cent - growing conditions since then have been good, business and consumer confidence have been high and the Canterbury rebuild continues apace.

“All these factors mean that we can anticipate relatively strong growth resuming in the September quarter. As the Reserve Bank Governor has noted, New Zealand is one of the fastest growing economies in the developed world and that growth is expected to be maintained, and become more broadly based over the next couple of years.

“However, real risks and challenges remain in the global economy, especially for our most important trading partners. Today’s GDP result demonstrates the importance of the Government sticking with its proven policies aimed at keeping tight control of its spending, reducing the need for borrowing, and encouraging the job growth that in turn supports New Zealand families.”