New Zealand’s economy showed modest growth in the first quarter, coming out of a recession according to Statistics New Zealand. Despite this slight expansion, the economy is facing challenges as the Reserve Bank of New Zealand maintains its key interest rate at 5.5%, the highest since 2008, in an effort to control inflation.
Gross domestic product (GDP) increased by 0.2% from the previous quarter, surpassing economists’ expectations of 0.1% growth. Compared to the same quarter the year before, GDP rose by 0.3%, exceeding the estimated 0.2%. The New Zealand dollar strengthened following the release of the GDP figures, trading at 61.42 US cents in Wellington.
The Reserve Bank of New Zealand’s forecast for 0.2% growth in the quarter aligned with the actual GDP results, while its central bank has indicated that it does not plan to lower interest rates until the latter half of 2025, citing persistent core inflation. RBNZ Chief Economist Paul Conway emphasized the necessity of the current economic slowdown to bring inflation within
