NZ Economy Posts Modest Growth as Fuel Prices Bite
New Zealand's economy grew by 0.2% in the June quarter, according to Stats NZ data. This is in line with expectations and represents a modest rise driven by stronger house building. The growth rate was a mixed bag, reflecting increases in nine of 16 industries.
The surge in house building drove construction up 2.7%, while government services grew 2% and wholesale trade rose 1.3%. However, the weakest sectors were those strongly exposed to fuel prices, including road transport and support services, which fell 1.7%.
BNZ senior economist Doug Steel said there has been a stronger than expected economic pulse, but economists are expecting growth to continue unevenly through to the end of the year. The Reserve Bank last month raised the official cash rate at 2.75% and signalled rates will rise further to combat 4% inflation.