Published: Thu, March 15, 2018
People | By Leon Thompson

NZ dollar little changed before GDP data

NZ dollar little changed before GDP data

Next week's rate rise from the US Federal Reserve will put the Federal Funds rate at the Kiwi rate when it is expected to be boosted to a range of 1.50% to 1.75% now.

Gross domestic product expanded 0.6 percent in the three months to December 31, versus a 0.6 percent expansion in the third quarter, and was 2.9 percent higher on the year, Statistics New Zealand said.

"The New Zealand economy appears to have lost some momentum over the course of the a year ago", Westpac says in an economic note.

"Since population growth was about the same in both years, this represents a marked slowdown in per-capita GDP growth".

GDP per capita is down on the September quarter, coming in at just 0.1% growth, compared to 0.2% in the quarter before.

"The effects of higher fiscal spending are more likely to be felt in 2019 and beyond".

While ANZ senior macro strategist Phil Borkin agreed the economy has cooled, he said growth around trend of 3 percent "is nothing to be scoffed at", especially at a time when the economy has been grappling with a softer housing market, credit headwinds, late-cycle capacity pressures and increased political uncertainty.

New Zealand government bonds edged higher sending yields about 2.5 basis points lower at the long end of the curve.

Lions to release former top-10 pick Eric Ebron
Ebron, who played for three seasons at North Carolina, was drafted by the Lions in the first round (10th overall) in 2014. Still only 24 years old and with a tremendous amount of upside, there's going to be a strong market for Ebron's services.

Statistics NZ said wholesale, retail, rental and real estate services also grew strongly during the period.

Hot, dry weather appeared to have a negative impact this quarter on agriculture production, which fell 2%. Activity in the services industries - which accounts for about 66 percent of GDP - grew 1.1 percent in the quarter versus a 0.6 percent increase in the September quarter.

Overall agricultural production fell by 2.7 per cent, with lower milk production hitting dairy manufacturing and dairy exports, which fell 4.4 per cent.

Expenditure on GDP rose, underpinned by household spending and investment.

This was influenced by people eating out more and spending more on groceries and alcohol.

"Imports of capital goods such as aircrafts, factory equipment, and ICT increased considerably this quarter", Mr Dunnet said.

The New Zealand dollar was trading at 73.08 United States cents as at 11:55 am, from 73.30 cents immediately before the release.

Like this: