Economic Weekly: Bouncing back

There is a fair bit of data out this week – it’s a bit like the twelve days of Christmas, but for economic aficionados.  Notably, we’ll get an early Christmas present on Thursday morning from Stats NZ – the Santa Clause of the data world – with the release of the Q3 GDP result.

We expect the result to show a 13% qoq lift, which would represent a solid bounce back after the 12.2% decline we saw last quarter. That will still leave the economy about 2.2% smaller than it was before the pandemic went global, but all up the New Zealand economy has proven much more resilient than most expected earlier in the year. Recent data has shown activity bounce back on a whole range of fronts over the course of Q3, from retail trade to construction and export activity.

The result means NZ’s economic performance over the first nine months of 2020 is likely to have proven one of the stronger performers amongst its major peers. You can read the full preview from our GDP guru Jane Turner here.

All up, it means there’s plenty for kiwis to be thankful for these holidays. Our strong public health response to the pandemic – as well as our geographic isolation, and a fair bit of luck – mean we’ve had far fewer per capita COVID infections than our peers, and kiwi’s activity has generally been less curtailed too.

That’s not to say everything is hunky dory of course. With the New Zealand border likely to remain shut for a while to come yet, exports of services are likely to be disrupted for a while yet (we’ll get a reminder of that in this week’s BoP and GDP releases) . Still, the heart-warming scenes last week of the first vaccine recipients in the UK are a reminder that there is a light at the end of the tunnel – even if the timing around the global rollout remains uncertain.

This is our last Economics Weekly for 2020 – we’ll be back in the New Year. Stay safe and enjoy the summer – we’ll see you on January 11^th.