NZ Economy Sees Gradual Recovery Amid Global Uncertainty

The New Zealand economy is showing signs of a gradual recovery, but its growth remains fragile. The latest Quarterly Survey of Business Opinion from the New Zealand Institute of Economic Research (NZIER) indicates only a modest improvement in business confidence.

Christina Leung, deputy chief executive, notes that recent manufacturing and services indicators point to some recovery in activity. However, households and businesses remain cautious due to global uncertainty and the upcoming general election.

The NZIER survey shows that retail spending volumes fell in the June quarter as higher petrol and electricity prices reduced discretionary spending. The unemployment rate rose to 5.6% during this period.

Annual consumers price index (CPI) inflation increased from 3.1% in the March quarter to 4.1% in the June quarter, largely driven by fuel and electricity price surges. However, underlying inflation pressures are more contained, with non-tradable inflation easing slightly.