PHOTO: FILE
New Zealand’s economy has taken a bigger hit than expected, with the latest GDP figures revealing a 0.9% contraction in the June quarter – more than double the fall banks had forecast.
Major lenders had tipped a decline of around 0.4%, but the reality shows the downturn is much sharper, catching even seasoned analysts off guard.
Which sectors were hit hardest?
Of the 16 industries measured, a staggering 10 reported declines, with the most severe impacts seen in:
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🛢️ Mining
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🏭 Manufacturing
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🏗️ Construction
These key industries dragged down overall performance, underscoring just how widespread the slowdown has become.
Government response
Officials have been quick to blame international turmoil and uncertainty around Donald Trump’s tariff policies for the slump. But the figures look even grimmer compared to other economies, where growth has held up far better.
Is there a silver lining?
Some economists suggest the downturn could prompt faster interest rate cuts or targeted government spending, potentially softening the blow for households and businesses. Still, the sharp drop raises serious questions about New Zealand’s economic resilience heading into the next quarter.