New Zealand's economic growth slowed in the last quarter of 2019 as recession risks rise and policymakers now scramble to protect businesses against disruptions caused by the coronavirus pandemic.
The statistics office said New Zealand's gross domestic product (GDP) grew 0.5% quarter-on-quarter in the three months to December, in line with a Reuters poll of economists and slightly higher than the central bank's forecast of 0.4% for the quarter.
It compared with a revised 0.8% growth in the previous quarter. Annual growth slowed to 1.8% from 2.3%.
While the data shows a moderate pace of growth late last year, economists are likely to look past the indicators as they would not reflect the worsening economic effects of the virus seen in the first quarter.
The kiwi dollar <NZD=> was unmoved by the data.
"Today’s result predates the outbreak of COVID-19. It confirms our view that the economy was picking late last year. Nevertheless, we still expect a significant deterioration in economic activity over the coming year," said Westpac economist Satish Ranchhod.
The statistics department said growth in the quarter was led by a 0.6% rise in the service industries, while primary industries grew 0.5%.
New Zealand has 20 confirmed cases of COIVD-19, and has imposed tough travel and public gathering restrictions to stop the spread of the virus.
The government on Tuesday announced a NZ$12.1 billion fiscal package, the largest per capita stimulus in the world, as it attempted to soften the economic blow.
This came after the Reserve Bank of New Zealand (RBNZ) cut rates by a huge 75 basis points in an emergency meeting on Monday, and vowed to start to start large-scale asset purchases if needed.
"We expect the RBNZ will need to start large-scale asset purchases soon. Market intervention is also urgently needed," ANZ Senior Economist Liz Kendall said in a note, adding the best guess was that GDP will fall 3-4% this year.
Finance minister Grant Robertson has said growth is seen bottoming out by at least 1% despite the fiscal and monetary policy support.
(Reporting by Praveen Menon; Editing by Sam Holmes)
