New Zealand’s economy grew the least in two years in the first quarter, strengthening the case for central bank Governor Graeme Wheeler to cut interest rates further as soon as next month.
Gross domestic product rose 0.2 percent from the fourth quarter, hurt by a drought that curbed dairy output, Statistics New Zealand said in Wellington Thursday. That’s less than the 0.6 percent forecast by the Reserve Bank, which was also the median of 16 estimates in a Bloomberg News survey.
The local dollar, already the worst-performing major currency in the past three months, slid in anticipation the RBNZ will add to last week’s reduction in the official cash rate by a quarter percentage point to 3.25 percent. Cheaper borrowing costs and a depreciating exchange rate would strengthen export competitiveness — while stoking a housing market that’s seen prices surge in Auckland.
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