New Zealand has officially entered its second recession in 18 months as the latest GDP figures revealed a contraction in the economy during the last quarter of 2023. According to Stats NZ, the country's economy shrank by 0.1% in the quarter ending in December, with a per capita contraction of 0.7%. This decline follows a 0.3% contraction in the previous quarter, meeting the technical definition of a recession.
Stats NZ reported that New Zealand has experienced negative GDP figures in four of the last five quarters, resulting in an annual growth rate of just 0.6%. Economists had anticipated this downturn, with the central bank predicting a flat figure and various bank economists suggesting a range of outcomes from slight contraction to minimal growth.
When analyzed on a per capita basis, the data showed a consistent decline over the past five quarters, averaging at 0.8%. Despite these economic challenges, New Zealand has benefited from a record migration intake, reaching a peak of 141,000 new arrivals in 2023. This influx of population has helped support the economy, preventing an even steeper decline.
In response to the current economic conditions, Regulation Minister David Seymour indicated that the forthcoming budget would include cuts, including a reduction in the number of government workers. Seymour acknowledged the existing economic slump, emphasizing the need for adjustments to address the ongoing challenges faced by the country.
