“Statistics New Zealand’s release today of gross domestic product for the second quarter of 2024 shows another quarterly contraction” says Taxpayers’ Union economist Ray Deacon. “Although not yet another technical recession, this will almost certainly be true with the third quarter’s result expected to also signal a further decline.

However, Statistics New Zealand data on GDP per capita reveals that this has contracted by 4.6% over seven consecutive quarters and this exceeds the decline of 4.2% over the first seven quarters of the global financial crisis. It took another six quarters after this for GDP per capita to again rise consistently, signalling real economic growth had finally returned.” 

“This Reserve Bank engineered recession is serious and damaging, as much recent data indicates. Although there is some slight evidence of growing confidence, that has yet to be translated into increased investment and output in the face of continued weak consumer demand and high interest rates. The Reserve Bank must accelerate its program of reducing the official cash-rate in the light of continuing weakness in the economy and an expectation that third quarter CPI will fall under 2.5%.”

“The Government too must play its part by further spending cuts, especially at the bloated policy ministries and plethora of commissions. Strong fiscal consolidation played a big part in returning New Zealand to surplus after the GFC and this enabled debt to be paid down. The current Government must increase its efforts to achieve the same.”

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