| Consensus | Consensus Range | Actual | Previous | Revised | |
| Quarter over Quarter | 0.1% | -0.1% to 0.2% | 0.2% | 0.8% | 0.9% |
| Year over Year | 2.2% | 2.2% to 2.2% | 2.6% | 1.5% | 1.7% |
Highlights
New Zealand's economy slowed sharply in the three months to June as the full impact of the Iran conflict took effect, with GDP increasing 0.2 percent on the quarter after increasing by 0.9 percent in the three months to March. Growth picked up in year-over-year terms from 1.7 percent to 2.6 percent.
At its most recent policy meeting, held early in the month, the Reserve Bank of New Zealand's Monetary Policy Committee increased the official cash rate from 2.25 percent to 2.50 percent. In the statement accompanying that decision, officials noted the impact of the Iran conflict but judged that economic growth has"most likely resumed but remains uneven". They expect that recovery to"strengthen and broaden".
Market Consensus Before Announcement
Growth continues in New Zealand in the face of energy cost headwinds. The consensus sees GDP up 0.1 percent in Q2 from Q1 and up a decent 2.2 percent on year. Exports, construction, and other sectors are holding up surprisingly well.
Definition
Gross Domestic Product (GDP) data are a comprehensive measure of New Zealand's overall production and consumption of goods and services. GDP serves as one of the primary measures of overall economic well-being. GDP calculates the total market value of goods and services produced in New Zealand within a given period after deducting the cost of goods and services used up in the process of production. Therefore, GDP excludes intermediate goods and services and considers final aggregates only. The New Zealand System of National Accounts (NZSNA) is a comprehensive accounting framework based on an international standard (System of National Accounts, 1993).
Description
GDP is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Investors in the stock market like to see healthy economic growth because robust business activity translates to higher corporate profits. Bond investors are more highly sensitive to inflation and robust economic activity could potentially pave the road to inflation. By tracking economic data such as GDP, investors will know what the economic backdrop is for these markets and their portfolios. The GDP report contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. GDP components such as consumer spending, business and residential investment, and price (inflation) indexes illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.