- POSTED: 19 Jun 2014 11:19
New Zealand's economy grew by 1.0 per cent in the January-March quarter, driven by a huge boost in construction as a multi-billion dollar rebuild following the Christchurch earthquake gathers momentum.
WELLINGTON: New Zealand's economy grew by 1.0 per cent in the January-March quarter, driven by a huge boost in construction as a multi-billion dollar rebuild following the Christchurch earthquake gathers momentum, data showed on Thursday.
The quarterly rise, which was in line with market expectations, took annual growth for the year to March 31 to 3.3 per cent, Statistics New Zealand said.
"Construction was responsible for two-thirds of GDP growth this quarter," national accounts manager Gary Dunnet said. "This is the largest increase in construction in 14 years."
Christchurch is in the midst of a NZ$40 billion ($35 billion) reconstruction after the February 2011 earthquake, which claimed 185 lives and flattened much of the South Island city.
A housing boom in Auckland has also spurred construction in New Zealand's largest city.
Analysts said the robust growth would likely see the Reserve Bank of New Zealand continue to lift interest rates to 3.5 per cent in July as part of a tightening cycle it began in March to keep inflation within its 1.0-3.0 per cent target range.
"The outlook is for an above-trend pace of expansion over the reminder of the year, consistent with the continued removal of interest rate stimulus by the RBNZ," ANZ Bank senior economist Mark Smith said.
Finance Minister Bill English said New Zealand's growth was among the strongest in the developed world and the government would continue to pursue its economic goals, including a reduction in net debt to below 20 per cent of GDP by 2020.
"We are making good progress but our long-term challenge is to make the enduring structural changes needed for New Zealand to reach its economic potential," he said.