NZ: GDP likely surged by 0.6% in the March quarter - Westpac

Michael Gordon, Senior Economist at Westpac, estimates that the NZ GDP rose by 0.6% in the March quarter, led by a surge in construction.

Key Quotes

“While they expect the current account deficit to narrow to 3.0% of GDP, with lower oil prices reducing the import bill and tourism earnings continue their strong run.

We expect some solid but not spectacular results from the March quarter national accounts, to be released next week. That won’t leave financial markets with much to chew on – our forecasts are similar to the Reserve Bank’s, and we suspect they will be close to the median market forecasts as well.

Our indicators have been suggesting for several months that economic growth in the March quarter would be decent, but something less than the 0.9% quarterly pace seen over the second half of last year. That’s been confirmed by the more detailed data – in particular, the soft manufacturing and wholesale trade surveys this week have prompted us to revise down our GDP forecast from 0.7% to 0.6%. Meanwhile, we expect a further slight narrowing of the current account deficit, as weak dairy export prices are offset by positive factors elsewhere.”