The latest national accounts for New Zealand revealed that the nation fell into a “technical recession” in the March quarter – defined as two consecutive quarters of negative aggregate Gross Domestic Product (GDP) growth.
This followed a 0.7% decline in GDP over the December quarter of 2022 followed by another 0.1% decline over the March quarter.
Given New Zealand’s population is now growing at a near-record pace via strong net overseas migration, the growth picture was much worse when measured in per capita terms.
New Zealand’s real per capita GDP plummeted by 1.1% in the December quarter and a further 0.7% over the March quarter (see red bars below):
New Zealand’s per capita real gross national disposable income (NDI) also plunged by 2.2% and 0.9% respectively over the December and March quarters:
ANZ Bank has released a detailed report on New Zealand’s economy, which projects that the Reserve Bank’s 5.25% of interest rate hikes will deliver a multi-year recession in per capita terms:
“The household sector is where the rubber meets the road when it comes to domestic economic momentum. Household consumption accounts for more than 60% of expenditure GDP”:
“On a per capita basis, the economic outlook is quite anaemic (figure 10) as New Zealand goes back to its old tricks of growing the economy via migration induced population growth”:
Westpac also recently reported that household spending is declining, as indicated by real retail sales:
Westpac also forecast that per capita household spending will decline by 2% over 2023 and 2024 combined, which will further slow GDP growth:
The Reserve Bank has already delivered a mild technical recession. And now Kiwis are facing a prolonged, multi-year contraction in per capita GDP.
