New Zealand recession risks grow as export volumes fall again
NEW Zealand export volumes fell for a second straight quarter, adding to signs of a mid-year recession.
Exports of goods dropped 1.8 per cent in the third quarter from the previous three months, Statistics New Zealand said on Tuesday (Dec 3) in Wellington. Imports rose 3 per cent meaning net exports – which are comparable to measures used in the gross domestic product report – fell 4.8 per cent from the second quarter, when they dropped 7.9 per cent.
The Reserve Bank of New Zealand last week reiterated it expects a small economic contraction in the third quarter, putting the nation into a second recession in less than two years. The central bank has been aggressively cutting interest rates as the weak economy suppresses inflation, and signalled last week it expects to deliver a third straight 50-basis-point reduction at its next decision in February.
The economy contracted 0.2 per cent in the second quarter.
A report last month showed retail sales fell in the third quarter. Key data on construction and manufacturing are due in the coming days ahead of the GDP report on Dec 19.
Today’s report showed shipments of meat and wool declined in the quarter, even as dairy and forestry volumes rose. The data only reports goods exports and not services such as tourism, which are among the nation’s biggest export earners.
The jump in import volumes, which followed a 3.6 per cent gain in the second quarter, was led by a surge in fuel shipments and purchases of iron and steel. BLOOMBERG
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