New Zealand: GDP surprised to the upside in Q2 2021 – UOB

Economist at UOB Group Lee Sue Ann comments on the GDP figures in New Zealand during the second quarter.

Key Quotes

“The New Zealand economy grew 2.8% q/q in the second quarter, following a revised 1.4% q/q increase (+1.6% q/q previously) in the first quarter, exceeding expectations of 1.1% q/q. Compared to the same period one year ago, GDP rose by 17.4% y/y, following a revised 2.9% y/y gain in 1Q21 (+2.4% y/y previously), also way above expectations for growth of 16.1% y/y.”

“Overall… GDP numbers highlight the positive momentum in the New Zealand economy. But that was before the country’s recent first COVID-19 case and the introduction of associated social restrictions.”

“We expect to see a material decline in 3Q21’s GDP. But we have revised our GDP forecast to 5.3% in 2021, an upgrade from 4.9% previously, in response to … stronger-than-expected 2Q21 GDP growth. Our forecast for 2022 has been trimmed to 3.2%, from our earlier projection of 3.3% as border restrictions will likely stay in place next year, and amid a slow vaccine rollout.”