New Zealand’s building boom sustained economic expansion in the first quarter as the central bank considers whether to raise interest rates again as soon as next month.
Gross domestic product increased 1 percent from the fourth quarter, when it rose a revised 1 percent, Statistics New Zealand said in Wellington today. That’s less than the 1.1 percent forecast by the Reserve Bank and by economists in a Bloomberg News survey. Still, from a year earlier GDP rose 3.8 percent, the fastest pace since 2007 and more than the 3.7 percent median estimate.
The NZ$40 billion ($35 billion) rebuilding of earthquake-damaged Christchurch, surging dairy exports to China and the strongest immigration in 11 years mean the economy is expanding faster than its capacity, stoking price pressures. RBNZ Governor Graeme Wheeler on June 12 raised the official cash rate by a quarter percentage point to 3.25 percent, the third increase this year, and signaled more to come.