NZ GDP grew 3.3pc last year

New Zealand's economy grew 3.3 per cent last year, the fastest since 2007 before the global financial crisis, Statistics NZ said.

Most forecasts expect the economy to keep growing this year and next, although slightly more slowly than in the past year.

For the three months ended December 31, gross domestic product (GDP) grew 0.8 per cent, in line with Reserve Bank and other forecasts. That was led by shop sales and accommodation.

The economy grew a revised 0.9 per cent in the September quarter, down from 1 per cent reported earlier.

The quarterly figures showed the economy continued a "robust" path at the end of last year, Westpac economists said. Strong growth in retail and services was offset by weaker farming and mining related sectors.

The currency did not move on the GDP figures, trading at US74.7c after rising US2c overnight after the United States Federal Reserve said it was unlikely to raise rates in April. 

Global money markets had been expecting the US Federal Reserve to open the door to long-awaited interest rate rises.

BIG SPENDERS

Retail and accommodation increased 2.3 per cent in the December 2014 quarter, buoyed by a 15 per cent increase in international tourist spending, as reported on Wednesday.

New Zealand household spending also increased 0.6 per cent.

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"This is the largest growth we've seen in retail and accommodation since the 2011 Rugby World Cup," Statistics NZ national accounts manager Gary Dunnet said.

"While some of this growth comes from more spending by New Zealanders, overseas visitors had a bigger impact.

"Spending by Chinese, US, and UK visitors all increased in 2014, though Australians spent less."

Australia is New Zealand's biggest tourism market, but the New Zealand dollar has been high against the Australian currency, trading at A96.5c on Thursday. The exchange rate was under A80c at the start of 2013.

In the past year, overall retail trade and accommodation sales have risen 5 per cent.

Retail trade alone was up 1.8 per cent in the December quarter and has been rising for 16 quarters in a row, with higher sales of furniture, electrical products and hardware.

Total visitor spending last year hit $7.4 billion, up 13 per cent on the previous year.

Rental, hiring, and real estate services also grew 1.2 per cent in the December 2014 quarter. More house sales drove real estate services up more than 20 per cent, after falls in recent quarters.

Increased banking activity was reflected in a 1.1 per cent rise in financial services this quarter, while housing investment rose 5.2 per cent. Manufacturing activity was also up this quarter, with an increase of 1 per cent. The main driver was petroleum manufacturing, while imports of intermediate goods (which include fuels, lubricants, and industrial supplies) also increased. 

Food, beverage, and tobacco manufacturing was up 1.5 per cent, and exports of meat products and dairy products also rose. The size of the economy (in current prices) was $238 billion for the year ended December 2014.

The figures also showed the first fall in real incomes since the middle of 2012. The inflation-adjusted purchasing power of disposable income was down 0.5 per cent in the December quarter. That followed nine quarterly rises in a row because of stronger terms of trade as export values rose.

But in the December quarter, export prices fell more than import prices.

 - Stuff

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