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Business

Mixed feelings over NZ's latest GDP update

New Zealand's economy made a slight comeback, thanks to loosened COVID-19 restrictions.

Statistics NZ announced a three percent rise in the Gross Domestic Product (GDP) for the December quarter when Auckland was finally let out of level four lockdown. This is well above the 3.6 percent drop in September when the country was dealing with level four lockdown.

Finance minister Grant Robertson in a dark blue suit jacket and light blue, checkered dress shirt at a podium Grant Robertson is touting the GDP increase as a win via: Getty Images

Services industries led the upwards march - including businesses, retail, accommodation and restaurants.

Despite the rebound made since New Zealand has come out of lockdown, there are warnings that the economy is still not looking great. 

Otago University Senior Lecturer Murat Ungor says the GDP would have already slipped for the current quarter.

"Omicron is circulating widely in New Zealand, and we have global problems such as Russia's invasion of Ukraine," says Ungor.

He worries that the impact of COVID and the Russian conflict will be heavily felt by everyday Kiwis.

"All those price increases are passed to New Zealand's producers and consumers and with inflation increases, with the tensions, consumers confidence, business confidence goes down."

Ungor insists inflation is imminent in New Zealand over the next year or two at least.

Finance Minister Grant Robertson says it's a strong starting point for 2022, as Omicron challenges emerge - along with ongoing supply disruption and a global energy crisis.

Household spending was reported to be 4.3 percent above the December 2019 quarter - the last data collected before the COVID-19 pandemic unfolded.

An increase of 5.6 percent was seen reflecting the four-quarters to December last year compared to the four-quarters to December 2020.