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New Zealand GDP Climbs 2.4% On Year In Q1

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New Zealand's gross domestic product expanded 2.4 percent on year in the first three months of 2021, Statistics New Zealand said on Thursday.

That exceeded expectations for an increase of 0.9 percent following the upwardly revised 0.8 percent contraction in the previous three months (originally -0.9 percent).

On a seasonally adjusted quarterly basis, GDP rose 1.6 percent - again beating forecasts for a gain of 0.5 percent following the 1.0 percent decline in the three months prior.

Service industries rose 1.1 percent in the March 2021 quarter, following a subdued 0.2 percent increase in the December 2020 quarter. Growth in service industries was broad-based in the March 2021 quarter. Notable contributors were wholesale trade (up 4.0 percent), business services (up 1.9 percent), healthcare and social assistance (up 2.8 percent), and retail trade and accommodation (up 2.3 percent).

Goods-producing industries rose 2.4 in the March 2021 quarter. This follows a decline of 3.1 percent in the December 2020 quarter. Annually, goods-producing industries fell 2.5 percent over the year ended March 2021.

Economic activity in the primary industries rose 0.3 percent in the quarter, following a fall of 0.8 percent in the December 2020 quarter. Rises in agriculture and forestry were partially offset by falls in mining and fishing.

Expenditure on GDP rose 1.4 percent in the March 2021 quarter. This follows a 1.5 percent decline in the December 2020 quarter. On an annual basis, expenditure on GDP fell 0.4 percent in the year ended March 2021.

Household consumption expenditure rose 5.5 percent in the quarter. Increased spending was recorded on services such as accommodation, restaurants and cultural services, and on durable goods such as motor vehicles, audio visual equipment and clothing.

Gross fixed capital formation grew 6.4 percent in the March 2021 quarter, after a revised 0.7 percent fall in the December 2020 quarter.

Falling exports and rising imports made a negative contribution to expenditure on GDP in the March 2021 quarter. Both remain well below pre-COVID-19 levels.

Exports fell by 8.0 percent, driven by significant falls in exports of services (down 20.2 percent quarterly and 48.7 percent annually). This reflects the continued impact of COVID-19 border restrictions on international visitor and education spending at a time of year when it normally increases. On an annual basis exports declined by 15.9 percent.

Imports rose by 7.1 percent in the March 2021 quarter, driven by rises in most goods categories. Consumption goods and petrol were the main drivers this quarter. On an annual basis imports fell by 16.2 percent.

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