The 1.7% q/q rise in New Zealand’s production GDP and the 0.9% q/q rise in Australia’s GDP in Q2 were among the strongest increases among major advanced economies. (See Chart 1.) However, GDP growth will slow sharply over coming quarters. Recent output gains have been driven by a reopening bounce as services spending jumped, which will soon have run its course. While the high household savings rate will allow further strong gains in consumption in Australia, the savings rate is around 0% in New Zealand. Meanwhile, the housing downturn will continue to weigh on dwellings investment in Australia and homebuilding will start to fall in New Zealand before long, too. Our forecast that GDP growth will slow to around 1.5% in both countries next year is well below the analyst consensus.
Become a member to read more
This is premium content that requires an active Capital Economics subscription to view.
Already a member?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services