New Zealand GDP drops 0.6% in December quarter, worse than expected

Reserve bank had taken steps to engineer a ‘shallow recession’ in response to high inflation but shrinkage arrives early

New Zealand’s economy is shrinking, with gross domestic product down 0.6% last quarter, amid speculation a recession may be approaching.

Gross domestic product (GDP) fell 0.6% in the last three months of 2022, after a 1.7% rise in the September 2022 quarter. The drop at the close of the year was larger than predicted by any of New Zealand’s major banks. Annually, GDP is still growing – up 2.4% year on year, and despite the shrinking economy, unemployment remains close to record lows, at about 3.3%.