Timing is Everything
* GDP depressed for Q2, only to bounce in Q3
* Latest PSI, consumer confidence good enough
* Housing data still heated throughout August
* External deficit expected at 4.8% of GDP
As the saying goes, timing is everything. This is certainly worth bearing in mind for New Zealand’s recent economic performance measures. In particular, the 0.2% contraction we expect for Thursday’s Q2 GDP. This is not to say we think the economy is stalling and certainly not tipping towards another recession. Indeed, we still believe momentum is building in an underlying sense. It’s just that the June quarter figures will be severely depressed by the drought’s lagged effects as well as a bit of a breather in construction activity (along a steep uptrend).
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BNZ