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Economy slips into recession as GDP falls 0.1%

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RNZ

20 March 2024, 10:24 PM

Economy slips into recession as GDP falls 0.1%

The economy fell back into recession in the fourth quarter of last year, driven by weak consumer spending and wholesale trade.


Stats NZ data showed seasonally adjusted gross domestic product (GDP) fell 0.1 percent in the three months ended December, taking the annual growth rate to 0.6 percent.





It was the second consecutive quarter of contraction, following the previous quarter's 0.3 percent fall, meeting the technical definition of a recession.


GDP per capita decreased by 0.7 percent, on the back of higher net migration, and real gross national disposable income fell 1.4 percent.


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


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


Retail trade and accommodation fell 0.9 percent, while wholesale trade fell 1.8 percent.





Stats NZ said eight out of 16 industries saw increased activity, including rental, hiring, real estate, public administration, safety and defence.


The 2023 general election led to growth in public administration, it said.


The primary sector posted growth of 0.3 percent, after shrinking in the September quarter.


Manufacturing rebounded slightly, but fell 0.4 percent, following the previous quarter's 3.5 percent fall.