Our gross domestic product (GDP) rose 0.7% in the December 2024 quarter, after a 1.1% fall in the September 2024 quarter. For the first time in two years, GDP per capita rose 0.4%.
A surprise perhaps, but a pleasant one. A much-needed one. A vital one. A reason for hope.
Now, businesses, consumers and politicians are all wondering - have we finally left the darkest part of our economic tunnel?
Finance Minister Nicola Willis was predictably buoyant at the news.
She told broadcaster Mike Hosking that not only was it a positive number, but it was far bigger than anyone was predicting.
“This is an economy that has been bouncing along the bottom for a very long time, and now we are turning the corner,” she said.
Households, she was eager to point out, will be switching to lower mortgage rates.
She and her Cabinet colleagues will have breathed a collective sigh of relief.
Like every government, this coalition’s future is intrinsically linked to the economy’s performance.
The hope in Wellington will be that lower borrowing rates will flow through into the economy despite a recent slump in consumer confidence and rising unemployment.
But our economy is more than just the raw numbers. How we are feeling and experiencing daily life will help determine the speed of recovery.
As Willis acknowledged, many families and businesses continue to do it tough, navigating the tail of high inflation and interest rates.
Economists also remain cautious, like Dufresne’s friend Red warning him of the dangers of unbridled hope.
Headlines out of the United States of a potential recession amid a global trade war account for some of this apprehension.
And while 11 of the 16 industries surveyed by Stats NZ grew over for the quarter, professional and business services continued to struggle. Construction was down 3.1%, its sixth successive quarter of contraction and enough to wipe 0.2 points off the total growth number.
“Underlying economic momentum was firmer than we’d anticipated,” ANZ economist Henry Russell explained. “However, it would be a stretch to describe today’s release as ‘strong’. We’d chalk this up to the economy bouncing off the bottom.”
Infometrics chief forecaster Gareth Kiernan also said that, while the result was welcome news, economic activity was “patchy”.
And BNZ head of research Stephen Toplis talked about just how long the road to recovery might be.
“On a per-capita basis, our forecasts suggest the previous peak in activity will not be achieved until early 2028,” he said.
Maybe we are still in Dufresne’s tunnel, but we should be optimistic about seeing some light.
Hope, after all, is a good thing.
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