New Zealand's GDP growth likely increased in second quarter on robust migration - economists

New Zealand's economy likely grew in April-June, bouncing back from two-quarters of contraction and a technical recession, economists say.  

Aotearoa has worn the impact of deteriorating global economic conditions and local severe weather events but, thanks in part to a solid net migration bounce back, experts predict GDP growth of about 0.5 percent when the latest data is released on Thursday morning. 

Such a growth rate would be the fastest since the 1.4 percent of July-September last year and would follow a reduction of 0.1 percent in January-March 2023.  

"We're expecting a reasonable bounce," said independent economist Cameron Bagrie. "Obviously, we took a bit of a hit at the end of 2022 and then the first quarter of 2023, so Cyclone Gabrielle et al knocked us into what's called a technical recession."  

Service industries likely grew in March-June versus -0.6 percent in the previous quarter, said ASB.    

By contrast, transport, postal and warehousing likely contracted, the bank said.  

"Unsurprisingly, the sector has struggled to sustain its whopper bounce back after the initial border reopening, where pent-up demand helped it very quickly recover beyond pre-COVID levels."  

Looking ahead, business confidence was improving nominally and the housing market had turned a corner - but that wasn't necessarily a good thing, said Bagrie.  

Cameron Bagrie.
Cameron Bagrie. Photo credit: AM

"The last thing the Reserve Bank wants to see in 2024 is a re-ignition of inflationary pressures courtesy of a red-hot property market," he told AM.  

"We still need that low, tapered underperformance right through 2024 in order to get the inflationary thief back in jail.  

"The general consensus is, for 2024, we're still in that growth underperformance phase and that's just the necessary product that we need in order to contain inflation."   

Government statistics agency Stats NZ will release the March-June GDP data at 10:45am.