Growing, growing . . .

It couldn’t be called a boom but annual growth of 2.6%, the highest since 2007, is encouraging.

Finance Minister Bill English says:

“New Zealand’s economy continues to perform better than those of most other developed countries, despite uncertainties in Europe, the United States and suggestions that growth in China may come off its recent highs,” Mr English says.

“From the Government’s perspective, we cannot influence these external events, which are having an impact on New Zealand.

“In the current environment, it’s important that we continue with our wide-ranging economic programme to increase New Zealand’s long-term competitiveness and give our businesses the best chance of succeeding.

“We are focused on growth that is sustainable and built on higher savings and earnings, rather than consumption and debt. Households and businesses are recognising this need for change and are changing their behaviour.” . . .

“We are making good progress and the outlook is for further moderate growth over the next three or four years,” Mr English says.

GDP growth for the June quarter was .6%.

The main contributors to the increase in economic growth this quarter were, by industry:

  • agriculture (up 4.7 percent), with continued good growing conditions resulting in increased milk production
  • construction (up 3.3 percent), due to increases in heavy and civil (infrastructure) and residential building construction
  • transport, postal, and warehousing (up 2.7 percent), as air transport bounced back from disruptions due to the Chilean volcanic ash cloud in the same quarter last year
  • manufacturing (up 0.8 percent), due mainly to an increase in transport equipment manufacturing.

“The good pasture conditions in the first half of the year continued to contribute to economic growth this quarter,” national accounts manager Rachael Milicich said.

“We are also now seeing evidence of a rebuild in Canterbury following the earthquakes.”

Given how small our economy is and how dependent we are on the rest of the world, so much of which is struggling financially, a 2.6% growth in GDP is an achievement.

The government has been quite clear its aim is sustainable growth based on savings and earnings rather than debt.

Households and businesses have got that message. Opposition parties’ behaviour – fighting against spending cuts and calling for the government to spend here and subsidise there – show they haven’t.

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