Hon Dr Michael Cullen
Minister of Finance

24 March 2006 Media Statement

Cullen on December quarter GDP

Finance Minister Michael Cullen said today's GDP result was in line with the economy weakening as anticipated after more than five years of economic expansion.

GDP declined by 0.1% in the December quarter according to Statistics NZ.

"The result is consistent with what I have been saying for some time, that is, that the economy is weakening after a period of very high growth. It must be remembered that we have just enjoyed twenty one consecutive quarters of growth, nine of them over one per cent.

"This is the longest period of consistent economic growth the country has enjoyed since the mid-seventies," said Dr Cullen.

"There are still three hundred thousand more people in jobs than when the economic expansion began in 2000. And unemployment is still expected to remain one of the lowest in the developed world over the next few years.

"Today's figure is not surprising and only slightly less than the market consensus. In fact it may yet be revised upwards to a slightly positive figure," said Dr Cullen.

"It certainly underlines the value of the Working for Families package which from 1 April provides significant increases in take home pay for another 85,000 families. Those who claim the package is overly stimulatory at this time are clearly mistaken", Dr Cullen concluded.

ENDS

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