18 Mar 2013

Health of economy in spotlight this week

8:32 am on 18 March 2013

Figures showing how the economy performed in the last three months of last year are published this week.

Balance of payments statistics for the December quarter, giving a broad measure of the country's international dealings, are released on Wednesday, and Gross Domestic Product figures for the same period are out on Thursday.

Economists are expecting the economy to have grown by 0.9% in the period, which ANZ Bank chief economist Cameron Bagrie says followed a slowdown in the middle of last year.

He said momentum picked up reasonably strongly late in 2012, primarily lead by the housing market. Retail and other sectors also performed reasonably well.

But Mr Bagrie said of more interest is what will happen in the June quarter, influenced by the drought and KiwiSaver contributions increasing from 1 April.

He said the New Zealand economy is notorious for moving in fits and starts and one good quarter tends to be followed by a "pretty soggy" one. "I suspect history might repeat in that regard."

Mr Bagrie said expenditure measures should be strong, underpinned by robust consumer spending. That spending has continued to pick up this year, but Mr Bagrie says the deepening drought has farmers closing their wallets in recent weeks.