Quarterly NZ GDP figures, likely to be grim, but might hopefully point to better times ahead
The GDP figures for the second quarter of 2023 are due out next week, and economists are expecting them to be grim. The economy is in recession, and the war in Ukraine is putting further pressure on businesses and consumers.
But there are also some reasons to be hopeful. The government has announced a number of measures to support the economy, and the Reserve Bank has cut interest rates. These measures should help to ease the pain of the recession and lay the foundation for a recovery.
The GDP figures will be closely watched by businesses, consumers, and the government. Businesses will be looking for signs that the economy is bottoming out, while consumers will be looking for reassurance that the worst is behind us. The government will be looking for evidence that its policies are working.
What to expect from the GDP figures
Economists are expecting the GDP figures to show a sharp contraction in the second quarter. The economy is likely to have shrunk by around 1%, which would be the biggest quarterly contraction since the global financial crisis.
The contraction will be driven by a number of factors, including the war in Ukraine, the rising cost of living, and the government's efforts to contain the Covid-19 pandemic.
The war in Ukraine has disrupted global supply chains and led to higher energy prices. This has made it more expensive for businesses to operate, and has reduced consumer spending.
The rising cost of living is also putting pressure on households. Inflation is at its highest level in decades, and wages are not keeping pace. This is making it difficult for people to make ends meet.
The government's efforts to contain the Covid-19 pandemic have also had a negative impact on the economy. Lockdowns and travel restrictions have disrupted businesses and reduced economic activity.
Reasons to be hopeful
Despite the grim outlook, there are also some reasons to be hopeful. The government has announced a number of measures to support the economy, including a $20 billion business support package and a $12 billion cost of living package.
The Reserve Bank has also cut interest rates, which should help to make it cheaper for businesses to borrow money and invest.
These measures should help to ease the pain of the recession and lay the foundation for a recovery.
Conclusion
The GDP figures for the second quarter of 2023 are likely to be grim, but there are also some reasons to be hopeful. The government has announced a number of measures to support the economy, and the Reserve Bank has cut interest rates. These measures should help to ease the pain of the recession and lay the foundation for a recovery.
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