New Zealand’s economy shrank by 0.2 percent in the second quarter of 2024, as key sectors like retail, construction, and agriculture saw significant declines, according to data from Stats NZ.
Retail and wholesale trade have been on a downward trend since 2022, with declines of 1.3 percent this quarter. A 0.4 percent contraction in construction, combined with reduced forestry and logging, further hit agricultural output.
Sectors like information technology, manufacturing (driven by transport equipment), and healthcare experienced a slight growth. Household spending rose by 0.4 percent, largely due to food purchases, though there was less demand for big-ticket items.
The annual growth rate stands at -0.5 percent, with individual shares of the economy falling for the seventh consecutive quarter.
Real gross national disposable income dropped by 1.1 percent year-on-year.
Although revisions to previous data showed the economy had avoided a technical recession, economists were surprised by the scale of the slowdown, especially in May and June.
The Reserve Bank responded by cutting interest rates, with more reductions expected. New Zealand’s economic performance lags behind that of its major trading partners, and forecasts suggest minimal growth in the coming year.
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