Hon Trevor Mallard
Acting Minister of Finance

29 September 2006 Media Statement

Comment on GDP figure

Acting Finance Minister Trevor Mallard said today’s GDP result was consistent with market expectations and made the prospect of a soft landing increasingly likely.

GDP grew by 0.5 percent in the June Quarter and 1.9 percent for the year ended June 2006 according to Statistics New Zealand. Growth in the quarter was slightly lower than the market median expectation.

"The domestic economy is easing as a result of a decline in investment spending and a slight reduction in consumer spending. This has led to a reduction in imports. Exports are starting to show signs of life and export growth should continue over the medium term as the dollar falls as part of the normal economic cycle.

"This result today is consistent with the rebalancing we have been expecting in the economy as a result of the slowdown," Trevor Mallard said.

"Yet again the reality of our economic situation flies in the face of alarmist pronunciations from the leader of the opposition who recklessly tried to talk our economy down by predicting a recession earlier in the year. His economic credibility has now taken another hit."

ENDS

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