Wellington, New Zealand (4E) – New Zealand’s economy grew higher-than-expected in the second quarter from the same period in 2012 as rising construction activity made up for the losses from the worst drought in three decades.
In the three months ended June 30, the gross domestic product (GDP) jumped 0.2 percent on the quarter, from an upwardly revised 0.4 percent in the previous month, according to Statistics New Zealand report Thursday. That figure matched economists’ estimates. GDP increased 2.5 percent from the previous year, topping economists’ median forecast of 2.3 percent, according to data compiled by Bloomberg News.
Statistics New Zealand acting national accounts manager Steffi Schuster said that a severe drought earlier in the year had an impact on agriculture and manufacturing output, though this was offset by the strong performance in the service industries.
Business services were were helped by the increased activity in architectural and engineering services. The quarterly growth also received a boost from retail trade and accommodation.
The central bank had predicted that growth will continue to rise in the next 12 months. Earlier this month, Governor Graeme Wheeler said he may begin raising interest rates in 2014 as the economy accelerates to 3.5 percent, the fastest pace since 2007, spurred by residential construction, consumer spending and post-earthquake rebuilding efforts in Christchurch.