New Zealand's run of producing stronger-than-expected economic growth may extend into the first three months of this year as a robust tourism industry and an expanding service sector continue to deliver pleasant surprises.
Gross domestic product rose 0.9 per cent in the three months ended December 31, beating the Reserve Bank's forecast for growth of 0.7 per cent in the quarter as the central bank underestimated the turnaround in the economy through the second-half of last year. On an expenditure measure, GDP climbed 1.1 per cent, almost twice that projected in a Reuters poll of economists which also underestimated the 1.4 per cent growth in September.
The Reserve Bank anticipates GDP growth will slow to 0.7 per cent in the first quarter of 2016 and noted increased pressures on productive capacity through the latter half of last year, even as a growing population, assisted by high net immigration, flooded the labour market.
Darren Gibbs, chief economist at Deutsche Bank New Zealand, said the economy is performing better than what people generally think as housing pressures seep out of Auckland into other regions, and as the labour market continues to generate new jobs even with the extra capacity.
New Zealand's service industries grew 0.8 per cent in the December quarter, and expanded 2.4 per cent from the same quarter a year earlier.
