NZ economy grows at twice expected pace
Thu, 21 Jun 2012 11:26a.m.
The New Zealand economy grew at its fastest quarterly pace in five years as good weather stoked milk production, and led to greater dairy manufacturing.
Gross domestic product grew 1.1 percent to almost $35 billion in the three months ended March 31, the fastest quarterly pace since March 2007, according to Statistics New Zealand.
That's more than twice the 0.5 percent pace forecast in a Reuters survey of economists and almost three times the Reserve Bank's 0.4 percent projection.
The Government statistics bureau revised the three previous quarters to 0.4 percent growth in each period, a cumulative increase of 1.2 percentage points.
"This quarter we saw growth spread across a number of industries, while in previous quarters the industry picture had been more mixed," national accounts manager Rachael Milicich said in a statement.
"Good growing conditions have been a major factor in the growth this quarter, and are reflected in both the milk production in agriculture and in meat and dairy manufacturing."
The Kiwi dollar climbed as high as 80.06 US cents from 79.55 cents immediately before the figures were released, before easing back slightly.
Economists expected better milk production and greater livestock slaughter would underpin quarterly growth, even as their outlook for economic growth slowed on delays to the Canterbury rebuild.
The economy grew 1.7 percent in the year ended March 31, and was $202 billion in current prices, Statistics NZ said.
Agriculture, forestry and fishing rose 2.1 percent in the quarter due higher milk production as good.
The manufacturing sector rose 1.8 percent as greater milk production stoked dairy manufacturing. Food, beverage and tobacco manufacturing climbed 3.2 percent.
Business investment rose 2.1 percent in the quarter, its biggest rise since December 2010, on more imports of plant and machinery and non-residential building work.
Construction activity shrank 0.1 percent as building work remains subdued ahead of the Canterbury reconstruction.
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