New Zealand retail sales rebound in sign recession has ended
The RBNZ estimates the economy grew 0.3 per cent in the fourth quarter
NEW Zealand retail spending rebounded in the final three months of 2024, adding to signs that lower interest rates are helping the economy emerge from recession.
Retail sales volumes rose 0.9 per cent in the three months to December after being unchanged in the third quarter, Statistics New Zealand said on Monday (Feb 24) in Wellington. Economists had expected a 0.5 per cent increase.
Sales rose for just the second time in the past 12 quarters after the Reserve Bank of New Zealand (RBNZ) aggressively cut interest rates at the tail end of last year. Economists forecast that lower borrowing costs and improved consumer sentiment helped the economy expand in the three months to December after it contracted 2.1 per cent in the six months to September.
The RBNZ began cutting interest rates in August but picked up the pace with three successive 50 basis-point cuts in October, November and February, taking the Official Cash Rate to 3.75 per cent.
The RBNZ estimates the economy grew 0.3 per cent in the fourth quarter. Chief Economist Paul Conway said last week that the revival will pick up in 2025 as a lower exchange rate and stronger beef and milk prices boost export revenues.
Better household spending follows data showing that the manufacturing industry expanded in January for the first time in nearly two years, and will be welcomed by the government which is betting on an economic recovery to form a favourable backdrop for the 2026 general election. Fourth-quarter GDP data are published Mar 20.
Consumers spent more at the nation’s department stores and on electrical goods in the quarter, today’s report showed. There was also a jump in accommodation and hospitality spending during a period that traditionally sees the onset of summer vacations and more tourist arrivals. Still, grocery store and car-yard sales declined. BLOOMBERG
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