The Government’s efforts to secure the nation’s recovery have been reflected in the “robust rebound” of GDP figures released today, says Minister of Finance, Grant Robertson.
Mr Robertson said the figures show that the economy remains resilient despite the ongoing impact of the COVID-19 pandemic.
GDP increased 1.6% in the first three months of 2021. The Treasury had forecast a modest decline of 0.2% in May’s Budget and economic commentators using more recent data had forecast a less than 1%. Internationally, the OECD average was 0.3%.
“New Zealanders’ confidence in the recovery saw a boost in retail spending on big ticket items, eating out and holiday accommodation, offsetting the COVID-related loss of overseas tourists in what is traditionally a busy time of year for the industry,” Mr Robertson said.
“Activity in the construction sector picked up to return to near record levels, while there were solid growth in wholesale trade, business services and manufacturing. Rising business confidence translated into higher investment, with a 15 percent increase in investment on plant, machinery and equipment during the quarter. The higher COVID-19 alert levels during the quarter only had a limited impact on the economy, thanks to the Government’s quick response to provide cashflow and confidence.
“Our economic recovery plan has kept people in jobs and supported business while ongoing targeted stimulus investment alongside strong exports of our products is putting money in households’ pockets. Quarterly activity in March was greater than it was in the December 2019 quarter.”
The economy was 2.4% above where it was in the March quarter last year, the Minister said.
“New Zealand continues to outperform the countries we compare ourselves to on this measure.”
Australia rose by 1.1%, the United States by 0.4%, and Canada by 0.3%, while Japan declined by 1.5% and the United Kingdom by 6.1%.
“There is still a lot of uncertainty around how COVID is affecting different parts of the economy. The global economy is recovering but the ongoing impact of COVID-19 means the environment will remain volatile for some time.
“Our economy remains robust despite ongoing uncertainty about the pandemic. We will continue to work with sectors which are still facing the impacts of COVID-19 to secure their recovery and rebuild. The Government will keep its focus on keeping New Zealanders safe, accelerating the recovery and dealing with long-standing issues such as climate change, housing and child wellbeing,” Mr Robertson said.