New Zealand Dollar Drops Following Disapointing GDP Data
- New Zealand GDP grew 0.5% y/y and 2.5% q/q, lower than analysts’ expectations
- Agriculture grew 4.3% along with retail at 1%, construction fell 2.1%
- Imports grew 1.3 percent as exports fell nearly half a percent in the March quarter
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The New Zealand Dollar weakened following the release of first quarter GDP, as yearly and quarterly data was reported worse than analysts’ expectations. The on-year growth rate was reported at 2.5 percent versus 2.7 percent expected, and the quarter-on-quarter reading was released at 0.5 versus 0.7 percent expected.
The Kiwi fell alongside local government bond yields, hinting that investors interpreted the weaker outcome as likely to make for a dovish RBNZ posture in the near term.
Growth was led by agriculture and retail trade in the March quarter, which added 4.3 and 1 percent, respectively. Household consumption added 1.3 percent while capital investment grew by 1.2 percent.
On the other side of the equation, construction fell nearly 2.1 percent, the first time the sector has contracted since June 2015. The external sector also dragged on growth: exports shed 0.4 percent while imports rose by 1.3 percent.
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