New Zealand’s Treasury: Indicators for June quarter GDP point to a drop in economic activity

Ahead of New Zealand’s (NZ) second-quarter Gross Domestic Product (GDP) data release on Thursday, the country’s Treasury published on Tuesday, noting that “indicators for June quarter GDP point to a drop in economic activity.”

Additional takeaways  

We anticipate the economy contracted by 0.4% in the quarter, down from a forecast of 0.2% growth at our Budget Update.

Economic data has been weak despite a period of record migrationled population growth. However, with migration levels normalizing, weakness is emerging across more services industries.

House sales continue to drop and, while interest rates are falling, average mortgage rates are still elevated limiting retail spending and house price growth.

There may be some light at the end of the economic tunnel with two weeks left in the September quarter, more timely indicators signal flat rather than falling activity for that quarter.