Soaring growth set to ease with housing market

Tuesday 29 June 2004

The economy began the year at a scorching pace but the momentum is expected to flag from here.

By The Landlord

The 2.3 per cent rise in gross domestic product recorded in the March quarter, and 3.6 per cent for the year, was well above most analysts' forecasts, which were clustered around 1.5 per cent, or the Reserve Bank's pick of 1.3 per cent.

But there are several reasons not to see the result as heralding similar strength to come:

* Quarterly GDP numbers jump around. Over the past year growth saw-toothed between 0.4 per cent, 1.5 per cent, 0.7 per cent and 2.3 per cent. And although Statistics New Zealand discounted any leap-year effect, Bank of New Zealand economist Stephen Toplis said every other leap year the March quarter had been big and the June quarter had been small.

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