NZ GDP Grows 1% Annually In June Quarter, Australia’s Rises 3.6%

0
170

WELLINGTON: New Zealand’s GDP grew 1.7% for the quarter ended June, 2020 on the back of the services industries, which makes up about two thirds of the economy. On an annual basis, the GDP increased just 1% from last year for the country, compared to Australia which grew by 3.6% from last year.

Australia’s growth comes on the back of rise in demand for exports and increase in household spending compared to NZ which is now seeing an opening of its borders.

“The reopening of NZ borders, easing of both domestic and international travel restrictions, and fewer domestic restrictions under the Orange traffic light setting supported growth in industries that had been most affected by the COVID-19 response measures,” Stats NZ national accounts – industry and production senior manager Ruvani Ratnayake said.

Source: Stats NZ

“In the June 2022 quarter, households and international visitors spent more on transport, accommodation, eating out, and sports and recreational activities.”

Overall household spending declined by 3.2 percent, driven by lower spending on goods such as used motor vehicles and audio-visual equipment, with a similar fall seen in retail trade activity, as per Stats NZ.

New Zealand moved from Red to Orange in the COVID-19 traffic light system toward the beginning of the June 2022 quarter.

The disruption caused by the COVID-19 pandemic has led to significant changes to typical seasonal patterns of economic activity. International visitor expenditure grew in the June 2022 quarter as border restrictions eased. This is in contrast to the strong falls that were observed in pre-pandemic June quarters, following the peak summer tourist season.

Household spending drives Australia’s growth

Household spending in Australia rose 2.2 per cent for the quarter, contributing 1.1 percentage points to GDP. Growth across the Tasman was driven by spending on travel related categories such as transport services (up 37.3 per cent) and hotels, cafes and restaurants (up 8.8 per cent), while spending on food fell 1.2 per cent.

Sean Crick, head of National Accounts at the ABS, said: “Rises in household spending and exports drove growth in the June quarter. This is the third consecutive quarter of economic growth, following a contraction in the September quarter 2021, which was impacted by the Delta outbreak.”

“Households increased spending on domestic and international travel as COVID restrictions further eased and international borders remained open. While spending on transport grew strongly, households were still only spending two thirds of what they did pre-pandemic,” Mr Crick said.

Increased travel activity by both households and business was reflected in increased Gross Value Added for the Accommodation and Food Services, and Transport, Postal and Warehousing industries.