NZ’s weak retail sales raise technical recession risk
GDP projection: Men working on a new residential building in Auckland. The RBNZ last week forecast 1.8% growth as it raised interest rates by a half-percentage point for a fourth straight meeting. — AP薅羊毛电报群（www.tel8.vip）是一个Telegram群组分享平台。薅羊毛电报群包括薅羊毛电报群、telegram群组索引、Telegram群组导航、新加坡telegram群组、telegram中文群组、telegram群组（其他）、Telegram 美国 群组、telegram群组爬虫、电报群 科学上网、小飞机 怎么 加 群、tg群等内容。薅羊毛电报群为广大电报用户提供各种电报群组/电报频道/电报机器人导航服务。
WELLINGTON: New Zealand posted a second consecutive quarterly decline in retail sales volumes, opening up the possibility that the economy fell into a technical recession in the first half of the year.
Sales adjusted for inflation dropped 2.3% in the three months through June, confounding economists’ expectations for a 1.7% gain, government data showed yesterday. That followed a 0.9% decline in the first quarter.
The result raises the prospect of back-to-back falls in quarterly gross domestic product, the definition of recession in New Zealand. The economy shrank by 0.2% in the first quarter.
While leading indicators of exports, manufacturing and construction have been soft, no economist predicts a slump.
Indeed, the Reserve Bank of New Zealand (RBNZ) last week forecast 1.8% growth as it raised interest rates by a half-percentage point for a fourth straight meeting.
“Much weaker than expected retail volumes highlight the risk that New Zealand was in a technical recession in the first half of 2022,” said Mark Smith, senior economist at ASB Bank in Auckland. “This is not our core view.”,
ASB currently expects the economy grew 0.8% in the second quarter, and will revise that view in coming weeks as more data emerges. The gross domestic product report is due on Sept 15.
Economists said that even a sharper-than-expected drop in economic growth wouldn’t deter the RBNZ from its tightening path.
The central bank last week increased the Official Cash Rate (OCR) to 3% and said it would continue to tighten “at pace.” It projected a peak for the OCR of 4.1% next year.
“On face value, today’s data suggest the economy may have been in a technical recession in the first half of the year,” said Miles Workman, senior economist at ANZ Bank in Wellington.
Still, “capacity pressures are so stretched that weaker-than-expected economic activity may not necessarily translate into weaker-than-expected inflation,” he said.
ANZ provisionally projects 1% growth in the second quarter, and forecasts the RBNZ will hike the OCR to 4% by the end of 2022. — Bloomberg