New Zealand’s GDP Growth Slowing in Second Half, Treasury Says

New Zealand’s GDP Growth Slowing in Second Half, Treasury Says
Yachts are moored in the Viaduct Harbor as the central business district stands in the background in Auckland, New Zealand. Photographer: Brendon O'Hagan/Bloomberg

New Zealand’s economic growth is slowing in the second half of 2012 amid weakness in manufacturing, exports and consumer spending, according to the Treasury Department.

There is a risk that growth in the three months through September may be less than the 0.6 percent expected, the Wellington-based department said in a report on its website. Gross domestic product expanded 0.6 percent in the second quarter following a 1 percent pace in the first three months.

“The outlook is not without its headwinds, with parts of the economy looking to have lost momentum over recent months,” the Treasury said in its monthly report, which doesn’t contain new forecasts.

Manufacturing and the services industries are slowing, adding to signs of a sluggish end to 2012, the Treasury said. Slow growth adds to the case for the central bank to keep the official cash rate at a record-low 2.5 percent until next year.

Nine of 16 economists surveyed last week by Bloomberg News expect no change in borrowing costs until the second half of 2013. Four see an increase in the first quarter and three predict a rise in the second quarter from the current rate.

Employment confidence rose in the third quarter and is still the second-lowest since the the 2008-09 recession, according to a survey today from Westpac Banking Corp. Reports last month showed manufacturing contracted at a faster pace while the services industry was the weakest since October 2009.

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