New Zealand to avoid recession amid quicker return of tourism, cyclone recovery


Share post:

Bloomberg | | Posted by Zarafshan Shiraz

New Zealand will avoid a recession as more tourist arrivals, cyclone recovery and government spending support growth, according to Treasury Department forecasts.

New Zealand to avoid recession amid quicker return of tourism, cyclone recovery (Unsplash)
New Zealand to avoid recession amid quicker return of tourism, cyclone recovery (Unsplash)

Gross domestic product will increase 1% in the year through June 2024, with growth in every quarter this year, according to projections published in the budget Thursday in Wellington. That compares with December’s fiscal update that forecast three consecutive quarters of contraction.

“The rebuild following the North Island weather events, a quicker return of tourism and less-contractionary fiscal policy are going to offer more support to the economy than anticipated,” Treasury said. “While we no longer anticipate a technical recession during 2023, growth remains low and labor market conditions will begin to deteriorate.”

Treasury’s view now contrasts with the Reserve Bank’s, which projected a recession in its February policy statement. The RBNZ will publish fresh forecasts next week as surging immigration prompts some economists to raise their predictions for how high interest rates will go.

Immigration is forecast to be 80,000 higher than previously expected with annual arrivals peaking at 65,000 in mid-2023, Treasury said.

The Treasury continues to expect inflation will slow and return to within the Reserve Bank’s 1-3% target band in late 2024.

Still, the government’s fiscal policy settings will be expansionary in the year through June 2024, which will add to price pressures, and it expects high interest rates will continue for longer.

“Weakness in economic demand over 2023 is expected to be less marked, which will translate into tighter monetary policy,” it said.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

Source link


Please enter your comment!
Please enter your name here


Related articles

Uttarakhand police chief asks pilgrims to stagger visit to Char Dham temples to reduce rush

The rush of pilgrims at the Char Dham temples in Uttarakhand is many times higher...

World Environment Day | How Tamil Nadu’s tiger reserves tackle the summer

A quintessential summer day in Tamil Nadu’s five major tiger reserves sees the dry rustle...

Beautification projects add splendour to Tangmarg and Gulmarg, J-K’s popular tourist destinations

Tangmarg and Gulmarg, two picturesque health resorts in north Kashmir's Baramullah District have undergone a...

Tamil Nadu’s Kodaikanal witnessing tourist boom due to annual summer festival

ANI | | Posted by Akanksha Agnihotri, Kodaikanal The queen of mountains, Kodaikanal in Tamil Nadu...