SECOND RECESSION HAS HIT NEW ZEALAND IN THE PAST 18 MONTHS

Thu 21 March 2024:

Government numbers show that New Zealand has entered its second recession in less than 18 months.

New Zealand’s official statistics office reported on Thursday that the country’s gross domestic product (GDP) contracted by 0.1 percent from October to December, after contracting by 0.3 percent in the third quarter.

Government statistics show that the economy performed even worse on a per capita basis, with GDP contracting by 0.7 in the final quarter of 2023.

A recession is conventionally defined by economists as two quarters in a row with negative growth.

Labour’s finance spokesperson Barbara Edmonds accused the government of failing to produce a single policy to help New Zealanders deal with the cost of living.

“Instead of policies to make childcare more affordable, making most prescriptions free, or half-price public transport, this Government has just spent nearly $3bn on landlords and is still planning tax cuts that won’t benefit working people in the way they promised,” Edmonds said.

The recession comes as the Reserve Bank of New Zealand has aggressively raised interest rates to tame some of the highest inflation in the developed world, putting a brake on economic activity.

The downturn also comes despite record inward migration to New Zealand that saw more than 133,000 net arrivals over the past year.

New Zealand Finance Minister Nicola Willis, a member of the centre-right National Party, blamed the recession on the “big spending, big taxing” policies of the former Labour Party government, which lost power in general elections in October.

“It is concerning that we are in recession even despite our rapidly growing population,” Willis said.

“This simply reinforces that our approach to strengthening and growing the economy is the right one. The good news is that inflation is tracking in the right direction.”

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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