NZ Economy Better Than Expected
The BusinessNZ Planning Forecast for the December 2020 quarter shows the economy in better shape than expected following Covid-19’s massive hit mid-year.
It shows a bounce-back after the 11 percent GDP drop over the June quarter, suggesting a V-shaped rather than a more prolonged U-shaped recovery.
Today’s figures from StatsNZ show GDP rebounding 14 percent in the September 2020 quarter, the strongest quarterly GDP growth on record in New Zealand.
The BusinessNZ Economic Conditions Index now sits at 10 for the December 2020 quarter, up 2 on the previous quarter and up 6 on a year ago.
BusinessNZ Chief Executive Kirk Hope said the huge fiscal stimulus package of around $50 billion has cushioned some of the worst impacts of Covid-19, and the continued monetary stimulus package - around $100 billion of quantitative easing, the slashing of the OCR and the introduction of the Reserve Bank’s $28 billion Funding for Lending programme - should ensure businesses and households can continue to borrow to support growth.
"New Zealand continues to face risks - including rising debt levels, inflated housing values and an ongoing regulatory burden - but new signs of economic growth and recovery are most welcome," Mr Hope said.
The BusinessNZ Economic Conditions Index tracks 33 economic indicators including GDP, export volumes, commodity prices, inflation, debt, and business and consumer confidence.