Economy slips into recession as GDP falls 0.1%

File photo.

The economy slipped into a recession at the end of last year.

Stats NZ says gross domestic product fell 0.1 percent in the three months ended December.

The economy shrank 0.3 per cent in the previous quarter fulfilling the technical definition of a recession

“Wholesale trade was the largest downwards driver this quarter, led by falls in grocery and liquor wholesaling; and machinery and equipment wholesaling,” says national accounts industry and production senior manager Ruvani Ratnayake.

Retail trade activity also fell, driven by furniture, electrical, and hardware retailing; and food and beverage services.

Results at industry level were mixed – 8 out of 16 industries increased, driven by rental, hiring, and real estate services; and public administration, safety, and defence.

“Increased activity associated with the NZ General Election contributed to growth in public administration, safety, and defence,” says Ratnayake.

The expenditure measure of GDP was flat in the December 2023 quarter. Rising net exports (exports less imports) had an upwards contribution to expenditure, while a rundown in retail and wholesale inventories offset this.

Household spending grew 0.5 per cent, led by a rise in spending on services, primarily transport. Consumption of non-durables was down due to reduced spending on alcoholic beverages and petrol.

GDP per capita decreased by 0.7 per cent in the December 2023 quarter.

The measure of GDP income (GDP(I)) has been introduced in addition to the GDP production, and GDP expenditure measures.

The income measure captures components such as wages and salaries earned by employees; profits of businesses ranging from sole traders to larger corporations; taxes paid by businesses; and subsidies received by them. GDP(I) is measured in current prices (not adjusted for inflation) only.

“The GDP income measure will provide our customers with a wider view of the economy,” says Ratnayake.

Quarterly income measure of GDP to go official in March 2024 has more information.

Responding to the release of the latest update to New Zealand’s GDP figures, Taxpayers’ Union Policy and Public Affairs Manager, James Ross, says New Zealand is in recession, with GDP shrinking for the second quarter in a row and GDP per capita in freefall for the fifth quarter in a row.

“As government after government sucks in more money from productive sectors and fritters it away on waste, New Zealanders’ quality of life is going to continue to nosedive.

“Kiwis cannot afford more of the same, and real growth must be the country’s priority. With our productivity already among the worst in the developed world, what will it take for the Government to wake up and smell the roses?”

 

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3 comments

Obvious

Posted on 21-03-2024 12:45 | By an_alias

So how can Tolls and the crew be spending like there is no tomorrow ?
How is the TCC debt been allowed to grow beyond what we can afford ?
How did they get a special LEVY ?


The Master

Posted on 21-03-2024 13:12 | By Ian Stevenson

NZ has been in recession for ages, it is just that the woke brigade did not want that to be known in 2023 so the favo mates did not have to face the music on that to.

TCC - yes another reckless and extravagant outfit, the debt increase and what is planned (using the word very loosely) reeks of out of control rampant spending like no tomorrow.... same as 6 years to 2023.


Not an economist ...

Posted on 21-03-2024 17:13 | By SonnyJim

We are in a 'recession' because last year our GDP dropped by 1/1000th? Isn't that just a blip? Would other countries call that a "Recession"?


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