Recovery Strengthens

The economy grew solidly in the final quarter of last year, but according to a recent statement from the New Zealand government, more work is needed to ensure a sustainable recovery that creates jobs and lifts the incomes of Kiwi families.

GDP data issued this week has shown the economy grew by 0.8 per cent in the December quarter, broadly in line with expectations. Growth was led by the manufacturing sector, which expanded for the first time in almost two years.

A small revision pushed growth in the September quarter to 0.3 per cent, but the economy contracted by 1.6 per cent in 2009 compared with the year before.

Finance Minister Bill English commented that these figures are another step in the road to recovery, but we are still regaining ground lost during the global crisis and New Zealand’s own recession, which started in early 2008.

“Our economy faces numerous challenges and that is reflected in consumer confidence figures which have dipped in the first part of this year,” Mr English said.

Consumers are expressing growing confidence in the economic recovery, with results from the most recent BNZ Confidence Survey showing 42 per cent of respondents expect the economy to get better, up from 35 per cent who felt so last month.

Many respondents to the survey were awaiting the May Budget to gain some certainty over New Zealand’s economic prospects over the coming year.