Economic growth picks up in September quarter

The Government’s sound policies are building a faster-growing economy, with annual growth moving ahead of Australia and supporting more jobs and higher incomes, Finance Minister Bill English says.

Statistics New Zealand today reported gross domestic product expanded by 1.4 per cent in the September quarter, the largest quarterly increase since December 2009.

This took annual growth – from the September quarter 2012 to the September quarter 2013 - to 3.5 per cent. Average annual growth was 2.6 per cent.

“It’s pleasing to end the year with more positive news after robust forecasts in the Half-Year Update this week,” Mr English says. “Since 2008, the Government has focused on building a solid platform for sustainable growth, which supports more jobs and higher incomes.

“New Zealanders’ hard work is now starting to pay dividends. Despite the worst drought for several decades earlier this year, New Zealand now has one of the faster growing developed economies in the world.

“And just yesterday ANZ confirmed business confidence is at its highest level since February 1999, with manufacturing confidence hitting a 15-year high. The current account deficit is half what it was five years ago and we are on track to fiscal surplus in 2014/15.

“At the same time, net government debt is predicted to peak $5 billion lower than the level forecast in Budget 2013 and interest rates are well below where they were in 2008. The outlook for the economy, surpluses and debt is significantly better than it would be under opposition parties’ irresponsible policies of more taxes, more debt and more spending,” Mr English says.

“That is good news for families, because under this Government it will mean more jobs and higher incomes.”

New Zealand’s latest 3.5 per cent annual economic growth compares with 2.3 per cent in Australia, 1.8 per cent in the US, 1.9 per cent in Canada, 2.4 per cent in Japan, 1.5 per cent in UK and a negative 0.4 per cent in the Euro area. Growth across the OECD averaged 1.4 per cent in the year to September.

Mr English noted that the latest quarterly growth was reasonably widespread across the economy, with significant positive contributions from agriculture, fishing and forestry, manufacturing, construction and retail trade.

“However, it is early days,” he says. “The Government was elected to provide conditions for higher long-term growth for New Zealanders and their families. There is a long way to go before we have locked that in.

“In particular, we must avoid the mistakes made in the mid-2000s, when poor decisions by the Labour government meant big increases in government spending.

“That’s why the Government will continue with its successful economic programme, to get back to surplus, to improve economic competitiveness and productivity, to deliver better public services and to rebuild Christchurch.

“These latest statistics, following a string of encouraging economic and business confidence data, show that New Zealanders’ have a brighter future.”

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