New Zealand construction and manufacturing contracted in the third quarter, government reports showed, adding to the case for the nation’s central bank to keep interest rates unchanged until a recovery strengthens.
New Zealand’s consumer prices unexpectedly fell last quarter amid a sluggish economy and cheaper imports, giving the central bank scope to prolong a period of record-low interest rates. The local currency slumped.
New Zealand’s central bank left its benchmark interest rate unchanged, saying increases in the next two years will be slower than earlier indicated as the nation’s worst earthquake in 80 years curbs near-term economic growth.
New Zealand’s economy expanded more than economists forecast in the fourth quarter as stronger exports and construction helped the nation avoid a recession before a Feb. 22 earthquake that may have stalled growth.
New Zealand’s central bank will raise interest rates this year, most economists in a Bloomberg News survey said, after a report showed manufacturing and farming led the fastest quarterly growth in more than a year.
New Zealand posted its first trade surplus in eight months in February as record-high commodity prices boosted exports of milk powder and lumber, while an aircraft purchase raised imports more than economists forecast.