Government figures indicate that New Zealand has entered its second recession within 18 months.
According to New Zealand’s official statistics agency, the country’s gross domestic product (GDP) contracted by 0.1 percent in the October-December period, following a 0.3 percent decline in the previous quarter.
The per capita GDP also saw a more substantial decline of 0.7 percent in the final quarter of 2023, as reported by government figures.
Economists typically define a recession as two consecutive quarters of negative economic growth.
This economic contraction coincides with the Reserve Bank of New Zealand’s aggressive interest rate hikes aimed at curbing some of the highest inflation rates among developed nations, which has slowed economic activity.
Despite a record influx of over 133,000 net arrivals in the past year, the downturn persists.
New Zealand’s Finance Minister Nicola Willis, representing the centre-right National Party, attributed the recession to the “big spending, big taxing” policies of the previous Labour Party government, which lost power in the October general elections.
Willis expressed concern, stating, “It is concerning that we are in recession even despite our rapidly growing population,” “This simply reinforces that our approach to strengthening and growing the economy is the right one. The good news is that inflation is tracking in the right direction.”
Labour’s finance spokesperson, Barbara Edmonds, criticized the government for not introducing any policies to assist New Zealanders in coping with the rising cost of living.