KEY POINTS:
New Zealand's economic growth slowed in the third quarter as spending by consumers eased.
The economy grew 0.5 per cent in the three months ending September after growing a revised 0.8 per cent in the June quarter, a Statistics New Zealand report today showed. Household spending grew 0.3 per cent in the third quarter, compared with 0.5 per cent growth in the previous three months.
"The move shows an easing in growth for our economy," Bank of New Zealand chief economist Tony Alexander told nzherald.co.nz
A report last week showed that two-thirds of the retail industry recorded a drop in October sales, which translated into a 0.7 per cent fall in retail sales for that month, compared with a 1 per cent rise in September.
The Reserve Bank of New Zealand has lifted the official cash rate a total 1 percentage point this year in an effort to tame inflation, which it aims to keep between 1 per cent and 3 per cent.
Mr Alexander said today's gdp figures doesn't have much of a bearing on his interest rate forecast.
"The Reserve Bank will stay on hold until late 2008" when there might be scope for a rate cut in December, Mr Alexander said.
The Reserve Bank held the official cash rate at a record 8.25 per cent on December 6 amid expectations factors including high oil prices and the dairy boom will send inflation above 3 per cent.
Underpinning overall economic growth in the third quarter was the services sector, which recorded a 0.7 per cent increase thanks to the finance and business service providers, Statistics New Zealand said.
