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GDP growth slows to 0.2 percent

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Staff Reporter

20 June 2024, 6:00 PM

GDP growth slows to 0.2 percentEconomic plans aim to boost recovery

A slight rise in GDP for the March quarter underscores the need for stronger economic measures, Finance Minister Nicola Willis said.

Stats NZ released data showing a 0.2 percent increase in GDP for the quarter ending in March.

While this marginal growth remains technically positive, Willis pointed to the ongoing economic challenges faced by New Zealanders.

"Today's data is technically in the positive, but it is a reminder of the reckless spending and economic mismanagement of the previous government," Willis said.

"New Zealanders are feeling the long shadow of a prolonged period of high inflation, with high interest rates contributing to a deeper and more persistent downturn than previously forecast."

Willis acknowledged the difficulties many locals face, citing the ongoing cost of living crisis.

"I know how tough it is for people right now who are still struggling," she said. "We have a plan to turn things around. Our Government knows New Zealanders are hurting and need hope for the future."

The government's strategy focuses on prudent spending, lower taxes, and rebuilding economic foundations.

Despite current hardships, Willis highlighted a promising outlook based on Treasury's Budget forecasts.

"While it’s hard to see through the immediate conditions, Treasury’s Budget forecasts show an improving outlook from the second half of this year, with inflation coming under control, interest rates dropping, and growth recovering," she noted.

Recent data shows inflation tracking in a favorable direction.

Food prices rose by only 0.2 percent in the year to May 2024, marking the smallest increase since September 2018.

Willis believes this trend will ease the financial burden on families.

Tax relief measures and support for early childhood education are also set to benefit New Zealanders.

"From 31 July, Kiwis can look forward to tax relief in their pay packets, and eligible families will benefit from the FamilyBoost payment starting 1 July," Willis said.

She encouraged residents to visit Budget.govt.nz/taxcalculator to see the potential benefits of the tax relief package.

"Our Government is working hard on the drivers of productive growth: better education and skills, improving infrastructure, more competition and less red tape, stronger global connections, and a smarter approach to science and innovation," she concluded.