New Zealand entered a technical recession at the start of the year, registering the second consecutive quarterly contraction in its economy of 0.1%, according to figures from the statistics agency Stats NZ published on Thursday (June 15th). The drop in GDP for the first three months follows a 0.7% decline in the last quarter of 2022. A technical recession is defined as two consecutive quarters of economic contraction.
It is New Zealand’s first recession since 2020, when the pandemic kept its borders closed and weighed on its exports. Finance Minister Grant Robertson said the result was “not a surprise”, given the global economic slowdown, high inflation and destructive weather in the North Island. The January floods in Auckland, the country’s largest city, and then the damage caused by Cyclone Gabrielle the following month, weigh in the balance. The cost of repairs can climb up to 15 million New Zealand dollars (8.5 million euros), estimates the government.
Inflation, meanwhile, stood in March 2023 at 6.7% over one year.
