The New Zealand economy probably continued to pick up pace in the first quarter, reflecting record milk production and increased livestock sent for slaughter, affirming the nation remains on a modest recovery track.
Gross domestic product grew 0.5 per cent in the first three months of the year, based on a Reuters survey of 13 economists. That would continue the mild pick-up in growth after GDP rose 0.2 per cent and 0.3 per cent respectively in the final two quarters of 2011.
A 0.5 per cent pace would exceed the central bank's latest estimate, released last week, of 0.4 per cent for the first quarter, a rate it expects continued through the second quarter. The Reserve Bank kept its official cash rate unchanged at 2.5 per cent in the June 14 Monetary Policy Statement and pushed out the track for future increases, while showing it doesn't share the Treasury's view of a return to fiscal surplus by 2015.
All the state agencies are grappling with volatile numbers in making their economic forecasts. Statistics New Zealand revised its quarterly retail sales data to a smaller decline of 0.6 per cent. On the strength of the revisions, some economists revised their GDP numbers.
"While the global backdrop presents downside risk to NZ's economic outlook and the absolute rate of activity growth is still subdued, we forecast this sequential improvement in growth momentum to continue gradually over 2012," Philip Borkin, economist at Goldman Sachs, said in a report.