New Zealand’s economy showed signs of growth in the first quarter of the year, with a GDP increase of 0.2% quarter-on-quarter, exceeding expectations of 0.1% growth. This growth helped the economy bounce back from a technical recession that occurred due to consecutive declines in the second half of 2023. On an annual basis, the GDP growth was also 0.2% year-on-year.
The primary industries experienced a modest growth of 0.2% quarter-on-quarter, while goods-producing industries saw a contraction of -1.3% quarter-on-quarter. Additionally, services industries witnessed a slight decline of -0.1% quarter-on-quarter. These varied performances across different sectors indicate the uneven nature of the economic recovery.
Despite the overall GDP growth, there was a concerning trend in GDP per capita, which decreased by -0.3% quarter-on-quarter. This marked the sixth consecutive quarterly decline in GDP per capita, with an annual decrease of -2.4% year-on-year. This decline in economic output per person suggests that while the economy as a whole is improving, the average individual’s economic situation is worsening.
Ruvani Ratnayake, senior manager of national accounts industry and production, highlighted that 8 out of the 16 industries experienced growth in the quarter. This mixed performance at the industry level further emphasizes the uneven nature of the economic recovery in New Zealand.
It is essential to monitor these trends closely to understand the full impact of the economic growth on the population. While the GDP numbers show positive growth, the decline in GDP per capita raises concerns about the well-being of individuals in the country. Policymakers and economists will need to assess these factors to ensure a more inclusive and sustainable recovery for all New Zealanders.