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Current price GDP increase lowest in ten years

Embargoed until 10:45am – 19 November 2009
Current price GDP increase lowest in ten years

Gross domestic product (GDP) in current prices increased 2.0 percent for the year ended March 2009, Statistics New Zealand said today. This increase is the lowest since the year ended March 1999 and follows a 7.7 percent increase in the March 2008 year. The latest annual result reflects the impact of the recent crisis in overseas financial markets.

Current prices means the effects of inflation have not been removed, unlike the headline estimates published in the quarterly GDP release. The current price annual National Accounts released today give detailed analysis of the structure of the New Zealand economy up to the year ended March 2009.

Gross operating surplus (business profits) contributed to the low increase in GDP in the March 2009 year, rising 0.3 percent. This compares with an increase of 10.5 percent in the previous March year. Compensation of employees (mainly wages and salaries) increased 4.0 percent for the latest year.

National disposable income measures the total income available to New Zealand residents (from all sources, both domestic and overseas) for spending or saving. In the March 2009 year, national disposable income rose 1.5 percent. The increase is the lowest since the year ended March 1992.

Consumption expenditure (spending) by households and government increased 4.2 percent in the year ended March 2009, the lowest increase since 2001. Household spending increased 2.7 percent in the latest March year, compared with increases in excess of 4.0 percent for the years ending March 1994–2008. Central and local government spending increased 8.9 percent and 7.0 percent, respectively, in the year ended March 2009.

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Investment in fixed assets decreased 3.8 percent, due to declines in investment in residential buildings and transport equipment in the year ended March 2009.

National saving (for the whole economy) was $0.5 billion in the year ended March 2009. This compares with national saving of $4.1 billion in 2008. The increase in spending outweighed the increase in national disposable income, resulting in lower national saving.

National Accounts Year Ending March 09 (pdf)

National Accounts Year Ending March 09 - Tables (xls)

ENDS

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