Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


March 2014 Monthly Economic Indicators

The March Monthly Economic Indicators (MEI) was published today on the Treasury Website at 2:00pm. The report provides a summary of recent economic events.

The main points:
• Real GDP grew by a robust 0.9% in the December 2013 quarter, and the current account deficit narrowed sharply.

• All signs remain consistent with the economy maintaining significant momentum in the first half of 2014.

• International economic data were broadly positive, despite financial market jitters


This month’s Special Topic looks at the issue of New Zealand’s trade concentration, particularly in light of China’s rise in importance as a trade partner in recent years.

Read more at: http://www.treasury.govt.nz/releases/2014-03-31

--

Executive Summary

Real GDP grew by a robust 0.9% in the December 2013 quarter, and the current account deficit narrowed sharply.

All signs remain consistent with the economy maintaining significant momentum in the first half of 2014.

International economic data were broadly positive, despite financial market jitters.

The two major data releases for the December quarter confirmed previous signs of a strong end to 2013 for the economy. Real production GDP grew by 0.9% from the September quarter and by 3.1% from a year ago, with a continuing broad-based pick-up in activity. Meanwhile, the current account deficit narrowed markedly, to 3.4% of GDP, driven by a surge in dairy export volumes.

All signs remain consistent with the economy maintaining an above-potential pace of growth in the first half of 2014. Confidence in the business sector remains buoyant: the ANZ’s Business Outlook measure reached its highest level since March 1994 in February and other indicators remain rooted in expansionary territory too. It is a similar picture in the household sector as well. Westpac’s seasonally-adjusted consumer confidence measure hit a nine-year high in the March quarter and there are clear signs of a pick-up in discretionary spending.

Ongoing increases in net inward migration flows will also continue to add to aggregate demand in the near term. The Reserve Bank indicated that the 25 basis point increase in the Official Cash Rate (OCR) in March is likely to be the start of a 200 basis point rise over the next couple of years. With interest rates in most developed economies expected to remain at record lows for another year at least, the trade-weighted exchange rate reached a post-float high in the middle of March.

Looking slightly further out, we expect GDP growth to ease somewhat towards the end of the year and into 2015, but to remain at a robust pace. The elevated exchange rate will continue to weigh on exchange-rate sensitive sectors too (not least by further constraining spending by tourists). Meanwhile, the combined 10% fall in global dairy prices over the past three fortnightly auctions is a reminder that dairy prices can go down as well as up.

International economic data from the past month were mostly positive, although credit risks in China and developments in Ukraine caused some volatility in financial markets.

This month’s Special Topic looks at the issue of New Zealand’s trade concentration, particularly in light of China’s rise in importance as a trade partner in recent years.


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

NASA, NOAA: Find 2014 Warmest Year In Modern Record

Since 1880, Earth’s average surface temperature has warmed by about 1.4 degrees Fahrenheit (0.8 degrees Celsius), a trend that is largely driven by the increase in carbon dioxide and other human emissions into the planet’s atmosphere. The majority of that warming has occurred in the past three decades. More>>

ALSO:

Scoop Business: New Zealand’s Reserve Bank Named Central Bank Of The Year

The Reserve Bank of New Zealand’s efforts to stifle house price inflation by using new policy tools has seen the institution named Central Bank of the year by Central Banking Publications, a publisher specialising in global central banking practice. More>>

ALSO:

Science Media Centre: Viral Science And Another 'Big Dry'?

"Potentially, if there is no significant rainfall for the next month or so, we could be heading into one of the worst nation-wide droughts we’ve seen for some time," warns NIWA principal climate scientist Dr Andrew Tait. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news