GDP preview: Record migration masks household pain with economy on brink of 'technical recession'

A record number of migrants moving to New Zealand is likely masking just how weak the economy is for households.

The quarterly GDP figures for last December are out this Thursday and the common economic view is there's been little or no growth.

"Flat as a pancake," says Westpac.

"Hold the champagne," instructs Kiwibank. "It's not going to be flash."

The Gross Domestic Product, or GDP, measures the total value of all goods and services produced in a country.

In the three months to September 2023, it was worse than expected, with the economy shrinking 0.3 percent. Another negative result would mean New Zealand is technically in recession.

ASB economists are predicting just that, pencilling in a 0.2 percent fall. If that happens and there is no revision to last quarter's data, New Zealand will be in recession again. The last time was the summer of 2022/23.

The Reserve Bank is predicting a narrow escape with zero growth, as is Westpac and Kiwibank.

Other major commercial banks like ANZ and BNZ predict an increase of just 0.1 percent.

However, ANZ said another measure, GDP per capita or the amount of money generated per person, shows the "per capita recession rolls on".

Kiwibank adds: "For the average Joe or Jane, the numbers will likely  show a shrinking slice of the economic pie."

And from Westpac: "GDP per person has fallen by almost 4 percent from its peak. Normally, a fall of that size would be associated with a severe recession."

Record net migration last year of 141,000, along with stronger tourism numbers, are being credited with probably avoiding a negative number this week, although some economists say it's masking just how weak the economy is at the individual or household level.

If you want a silver lining to the gloomy economic outlook, Kiwibank said rate cuts "could commence later this year. And as interest rate settings are relaxed, confidence among businesses and households should build. Economic growth should gain momentum into 2025".

The only catch is you have to make it through the rest of 2024.