Revision to New Zealand data will show growth hasn’t been as weak as previously estimated

Stats NZ have released a preview od GDP revisions to be published on December 19.

Westpac summary:

The key points are as follows (note that slight further revisions to the numbers below are possible before their formal release):

• Real GDP growth (using the production-based measure) is likely to be revised up by 0.8ppts to 3.5%y/y in the year to March 2023 and by 1.1pts to 1.4%y/y in the year to March 2024.

• Real GDP growth using the expenditure-based measure is likely to be revised up by 1.3ppts to 3.9%y/y in the year to March 2023 and remain unchanged at 0.7%y/y in the year to March 2024.

These revisions imply that:

• Recent growth performance has not been as weak as previously estimated (indeed more in line with that seen in Australia).

• The decline in per capita GDP, while still large, has not been as steep as estimated previously.

• Labour productivity growth over the past two years has not been as weak as previously estimated and so growth in unit labour costs (productivity-adjusted wages) as implied by the National Accounts as been less than previously estimated.

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I suspect the RBNZ will not be taking these into account in its decision today, they have not yet been formally released as noted above. The Reserve Bank of New Zealand decision is due at 2pm New Zealand time on the 27th

• 0100 GMT on the 27th
• 2000 US Eastern time on the 26th

i.e. top of the hour!

A 50bp rate cut is the consensus estimate.

Previews:

• Reserve Bank of New Zealand meet Wednesday, November 27, 2024 – preview
• Reserve Bank of New Zealand rate cut expected on Wednesday 27 November – preview
• Reserve Bank of New Zealand (RBNZ) Shadow Board recommend a 50bp cash rate cut this week
• ANZ forecast a 50bp interest cut from the RBNZ next week
• Reuters poll: RBNZ to cut cash rate to 4.25% on November 27
• Goldman Sachs expects a 50bp Reserve Bank of New Zealand rate cut this month

This article was written by Eamonn Sheridan at www.forexlive.com.