Statistics New Zealand reported today that gross domestic product (GDP) increased by 3.0% in Q4 21. As economists point out, the data support forecasts that the Reserve Bank of New Zealand will raise the key interest rate again.
Fourth-quarter GDP was below economists’ average estimate of 3.2%, reversing from a 3.6% decline in 3Q21 as COVID-19 containment measures curtailed the country’s economic activity.
New Zealand’s largest city, Auckland, lifted a long-term lockdown that affected retail, manufacturing, construction, and leisure activities in Q3 21.
In addition, business investment was strong in 4Q21, while trade was a weighty factor due to more imports and lower inventories. Companies had to rush to use their inventories to meet customer demand.