New Zealand's economic health looks a little better with the economy growing slightly in the March quarter, ending a technical recession.
However, strong population growth is masking just how weak the economy is.
Figures from Stats NZ show the Gross Domestic Product rose 0.2 percent in the first quarter of 2024, in line with forecasts by the Reserve Bank.
Stats NZ's Ruvani Ratnayake said, "There were a range of results at industry level, with 8 of the 16 industries rising this quarter."
Rises were seen in rental, hiring and real estate services and especially electricity generation which was up 2.9 percent.
Food and beverage manufacturing also rose due to the rise of dairy exports like milk powder.
Falls were seen in several industries like construction, business services and manufacturing.
Westpac senior economist Michael Gordon said the result beat the bank's prediction of a continued recession but did not change its view.
"We expect growth to remain minimal over the course of this year, and indeed recent indicators suggest that the June quarter is shaping up to be quite soft."
Gordon also pointed out that despite ongoing high migration levels, GDP per capita or personal productivity was down 0.3 percent, the sixth straight quarterly decline.
"Don't pop the champagne just yet," said ASB economist Kim Mundy in an economic note.
"The headline figure is being flattered by NZ's strong population growth of late, thanks to very high levels of net immigration."
Mundy said at an individual level, "New Zealanders are increasingly getting a smaller slice of New Zealand's economic pie."
ASB said the figures show private spending did increase but was driven by a sharp increase in imports of low value goods, up 20 percent.
"This suggests that NZ households are possibly reverting to purchases from cheaper offshore platforms (like Temu) amid budget pressures."
The GDP figure was in line with Reserve Bank forecasts and is unlikely to change the story when it comes to interest rate cuts. The RBNZ is predicting inflation to come back into its target band of 1-3 percent by the end of the year. Inflation is currently running at 4 percent.
Any change to the OCR is currently flagged for the middle of 2025.
