ZCZC
BCN-01
NZEALAND-ECONOMY
Flat New Zealand economy prompts rate cut talk
WELLINGTON, June 20, 2019 (BSS/AFP) – New Zealand’s economic growth
remained sluggish at 0.6 percent in the first three months of 2019, official
data showed Thursday, fuelling expectations of another interest rate cut
before year’s end.
The modest increase in gross domestic product for the March quarter was
the same as the growth rate in the final three months of 2018, Statistics New
Zealand said.
It said the quarterly figure was boosted by a 3.7 percent rise in
construction and brought the country’s annual growth to 2.7 percent for the
year to March 31.
The Reserve Bank of New Zealand cut its base rate to a record low of 1.5
percent in May, attempting to boost slowing growth.
Capital Economics said the latest figures were likely to prompt further
action from the central bank.
“We think that economic activity will ultimately prove disappointing,
averaging just 2.2 percent in 2019, well below the economy’s potential growth
rate of around 2.8 percent,” economist Ben Udy said.
“If we’re right that may prompt the RBNZ to cut rates once more to a new
record low of 1.25 percent before the end of the year.”
BSS/AFP/HR/0940