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Economy expands less than expected in Q4

NZN 15/03/2017 Rebecca Howard

New Zealand's economy expanded less than expected in the fourth quarter, weighed by weaker activity in the primary sector.

Gross domestic product expanded 0.4 per cent in the three months ended December 31, following a revised 0.8 per cent increase in the September quarter, Statistics New Zealand said.

Economists had tipped quarterly growth of 0.75 per cent in a BusinessDesk poll. The economy grew 2.7 per cent from the same period a year earlier.

"Growth in service industries was partly offset by weaker activity in primary industries also flowing through into manufacturing," national accounts senior manager Gary Dunnet said.

Finance Minister Steven Joyce says the economy is "successfully navigating a still challenging international environment" and the continuing trend was for a growth rate ahead of most other developed countries.

Labour's finance spokesman, Grant Robertson, says the latest figures are worrying.

"The slowdown was widespread, being driven by falls in agriculture and manufacturing output," he said.

"More worryingly, real GDP per capita fell 0.2 per cent from the September quarter, showing Kiwis are working harder and harder for less."

The Greens said the latest statistics were "disappointing" and measuring the economy through GDP wasn't really capturing what was going on.

"GDP isn't capturing increasing numbers of people sleeping in cars or increasing carbon pollution pouring into our atmosphere," said co-leader James Shaw.

The New Zealand dollar fell to 70 US cents from 70.37 cents immediately before the data release.

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