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New Zealand: Moderate rate of expansion going forward - ANZ

FXStreet (Bali) - Mark Smith, Senior Economist at ANZ, shares his take on today's NZ Q2 GDP, noting that growth prospects in New Zealand are for a moderate rate of expansion going forward, which is in line with the more neutral tone adopted by the RBNZ in the last policy meeting.

Key Quotes

"The pace of quarterly momentum eased slightly in Q2, with the 0.7% q/q percent rise in production-based GDP midway between the market expectation and the 0.8% RBNZ pick. Annual growth rose to 3.9%, the highest since late 2007. There were minor historical revisions to the level of GDP (+0.1%)."

"The services sector picked up the growth baton, with a 1.4% quarterly increase in value added for this sector, and rises in all the services components. The goods sector delivered a 0.7% increase, underpinned by strengthening construction activity, whereas activity in the primary sector contracted 0.7%, and falls were also seen for mining and agriculture, forestry, and fishing."

"Expenditure-based GDP rose 0.5%, in line with expectations, with a large negative net trade contribution offsetting a build-up in inventories, and strengthening private consumption and investment."

"Today’s data is historical. Our expectation is for a moderate rate of expansion in the economy going forward, consistent with the OCR sabbatical until early next year."

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