What will GDP be?

Liam Dann writes:

This Thursday figures are expected to show the New Zealand economy grew by at least 3.5 per cent in the year to June 30.

ASB’s economists are picking it to be as high as 3.7 per cent.

“We expect GDP lifted a whopping 1.2 per cent over the June quarter, led by construction, manufacturing and retail activity,” ASB senior economist Jane Turner writes in her preview.

That will be a stunning result for an agricultural economy that has just been through one of the most dramatic dairy price slumps in living memory.

Anything over 3% will be a stunning result, especially considering the dairy price slump. Opposition MPs have whined for years that we are too dependent on dairy and need to diversify, but these results are showing that the economy is diversified and resilient.

It’s hard not to draw the conclusion that the rock star economy is on the comeback trail – at least in the terms that the catch-phrase was originally coined by HSBC economist Paul Bloxham.

That is to say, relatively speaking.

New Zealand currently has one of the highest growth economies compared to peers in the Western developed world.

The country hasn’t had a recession in eight years now.

Long may it continue.

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