July 14, 2024

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New Zealand is emerging from recession, but economic problems persist

New Zealand is emerging from recession, but economic problems persist

Gross domestic product grew 0.2 percent in the first quarter, boosted by record immigration.

New Zealand’s economy has emerged from recession after a series of crises in the space of 18 months.

Gross domestic product (GDP) grew 0.2 percent in the first three months of the year, after contracting 0.1 percent in the previous quarter, official figures showed on Thursday.

Although better than expected, the rebound was met with little fanfare due to population growth due to unprecedented immigration.

On a per capita basis, GDP fell 0.3 percent in the first quarter, the sixth consecutive decline.

“The growth numbers mask weakness,” Craig Rennie, economist and policy director at the New Zealand Council of Trade Unions, said in a post on X.

Finance Minister Nicola Willis said New Zealanders were feeling the “long shadow” of higher inflation and higher borrowing costs.

“I know how difficult it is for people who are still struggling with the current cost of living crisis. We have a plan to turn things around,” Willis said, pointing to the need for “careful government spending” and “lower taxes for hard-working New Zealanders”.

New Zealand’s economy has struggled to grow following the Covid-19 pandemic, which has particularly affected the country’s key agriculture and tourism sectors.

New Zealand’s Reserve Bank has raised interest rates to a 14-year high, slowing economic activity in an effort to curb inflation, the highest in the developed world.

Prime Minister Christopher Lacson’s centre-right coalition unveiled a budget last month that proposes NZ$14.7 billion ($9 billion) in tax cuts over the next four years.

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