19 Mar 2015

GDP grows robustly, dollar driven by Fed

12:08 pm on 19 March 2015

The pace of economic activity has eased slightly, but remains robust thanks to higher tourist and household spending.

Official figures show gross domestic product, which is a broad measures of the health of the economy, expanded a higher than expected 0.8 percent in the three months to December.

That failed to move the dollar, which rose sharply earlier today after the United States Federal Reserve signalled fewer interest rate rises in the future.

The historical figures showed economic growth remained strong at the end of last year, mainly due to tourists spending more.

Statistics New Zealand said retail and accommodation spending experienced its largest quarterly jump since the 2011 Rugby World Cup.

On an annual basis, the economy grew 3.3 percent.

The higher than expected growth would usually prompt a rise in the dollar.

But investors' attention was on the US Federal Reserve.

The dollar jumped more than than two percent against its American counterpart early this morning after the Fed tempered its optimism about the growing US economy, before easing back.

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