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New Zealand growth hits pre-recession levels

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(Globalpost/GlobalPost)

New Zealand's economic growth reached a four-year high in 2012, the best since the country went through a recession that it has long struggled to shake off, official data showed Thursday.

Statistics New Zealand (SNZ) said gross domestic product (GDP) expanded 2.5 percent in the 12 months to December 2012, buoyed by a 9.4 percent rise in primary industries after good growing conditions in the first half of the year.

"This is the highest annual growth in GDP since March 2008, when the economic recession began," it said in a statement.

The annual growth figure was reached after a late surge in the final quarter, when GDP rose 1.5 percent, well up on market expectations of 0.9 percent and dwarfing the 0.2 percent recorded in the previous quarter.

SNZ said almost all economic sectors posted growth over the quarter, including agriculture, forestry, and fishing (up 2.6 percent), retail (up 2.3 percent) and construction (up 1.8 percent).

New Zealand was officially in recession from early 2008 to mid-2009, but the impact of the downturn lingered for years, with growth rates remaining stubbornly sluggish in the farm-reliant economy.

The February 2011 Christchurch earthquake that levelled the country's second largest city further dampened growth, although a multi-billion dollar rebuilding programme in the city is now providing some construction-sector stimulus.

SNZ said a drought affecting the North Island presented a new challenge for the economy and was likely to impact on growth in 2013.

Finance Minister Bill England said on Wednesday that the drought could shave 1.0 percentage points off growth this year as dry weather hits the dairy industry, the country's biggest export earner.

ns/mp/ia

http://www.globalpost.com/dispatch/news/afp/130320/new-zealand-growth-hits-pre-recession-levels