New Zealand in technical recession

New Zealand is officially in a recession after gross domestic product (GDP) fell 0.1 per cent in the December 2023 quarter, when compared with the previous three-month spell, according to the latest figures from Stats NZ.

It follows a 0.3 per cent decrease in the September 2023 quarter and analysts define a technical recession as two successive quarters in which the economy contracts.

GDP per capita also fell by 0.7 per cent in the December quarter from the previous period and real gross national disposable income tumbled by 1.4 per cent.

Ruvani Ratnayake, Stats NZ’s national accounts industry and production senior manager, says wholesale trade was the largest downwards driver for GDP this quarter and dropped by 1.8 per cent, “led by falls in grocery and liquor wholesaling; and machinery and equipment wholesaling”. 

Retail trade and accommodation activity was also down 0.9 per cent, driven by furniture, electrical, and hardware retailing; food and beverage services; and motor vehicles and parts retailing.

Imports of goods and services were down 2.9 per cent – a fall in imports has an upwards contribution to expenditure on GDP – with passenger motor cars, intermediate goods and capital goods among the main contributors.

The value of motor cars imported in the December 2023 quarter was $1.42 billion, according to Stats NZ. This figure was down 12.4 per cent from the $1.62b seen in the September 2023 quarter.

The economy has shrunk despite record migration levels and population growth.