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29 May 2013
Flash: New Zealand's economy has gained momentum – Rabobank
FXstreet.com (Barcelona) - According to analysts at Rabobank, “New Zealand’s economy performed fairly well in 2012 growing 2.5% for the year as a whole. This is the fastest annual expansion in five years i.e., since 2007. The economy ended 2012 on a strong note with the economy expanding 1.5% QoQ in 4Q 2012. Growth of this magnitude is unlikely to continue into 2013 but we do forecast ongoing decent growth of 2.5% YoY.”
They went on to say , “house prices have turned up after a long period of weakness. Whilst NZ’s financial landscape did not have the financial engineering that was one of the destructive elements of the US sub-prime debacle embedded in it, there was significant imbalances in the sector that contributed to the economy starting recession in 1Q of 2008. The economy contracted for six straight quarters. The US economy only entered recession in 3Q of 2008 and it shrank for four straight quarters. Clearly a weak global picture undermined NZ’s economy but this was also a home-grown recession in NZ”
On a final note they commented, “there are tentative signs that consumers and businesses are becoming more optimistic. Consumer confidence has followed a roughly similar pattern to house prices in recent years, rising amidst recovery in 2010 only to fall thereafter. A convincing improvement only took hold in mid-2012 and continues on the latest reading (being for May). Business confidence has been less impacted by house price trends and has essentially held steady since mid-2010.”
They went on to say , “house prices have turned up after a long period of weakness. Whilst NZ’s financial landscape did not have the financial engineering that was one of the destructive elements of the US sub-prime debacle embedded in it, there was significant imbalances in the sector that contributed to the economy starting recession in 1Q of 2008. The economy contracted for six straight quarters. The US economy only entered recession in 3Q of 2008 and it shrank for four straight quarters. Clearly a weak global picture undermined NZ’s economy but this was also a home-grown recession in NZ”
On a final note they commented, “there are tentative signs that consumers and businesses are becoming more optimistic. Consumer confidence has followed a roughly similar pattern to house prices in recent years, rising amidst recovery in 2010 only to fall thereafter. A convincing improvement only took hold in mid-2012 and continues on the latest reading (being for May). Business confidence has been less impacted by house price trends and has essentially held steady since mid-2010.”