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Govt welcomes latest growth figures

NZN 15/06/2016

The government is welcoming the latest economic growth figures while Labour says they show no increase in real disposable income for ordinary Kiwis.

The latest data shows the economy grew at a faster pace than expected in the first quarter of this year.

Gross Domestic Product expanded 0.7 per cent in the three months ended March, ahead of the 0.5 per cent forecast in a Reuters poll of economists and the Reserve Bank's 0.6 per cent estimate.

Construction grew 4.9 per cent, the fastest quarterly rate since March 2014.

Finance Minister Bill English says the data shows solid economic growth during the quarter, which takes annual growth to 2.8 per cent.

"This broad-based growth demonstrates the increasingly diversified nature of the economy," he said.

"Despite the dairy sector continuing to be under pressure, other sectors are performing well."

Mr English says the annual 2.8 per cent growth rate puts New Zealand in the top 10 of OECD countries.

It compares with two per cent in the UK and the US, 3.1 per cent in Australia, 1.1 per cent in Canada and 1.8 per cent across the OECD.

Labour's finance spokesman, Grant Robertson, says the data also shows zero growth in real disposable income.

"Right now Kiwis are working extremely hard but they're playing catch up," he said.

"With house prices skyrocketing by $2450 a week in Auckland, the news that incomes aren't rising will be a bitter blow to those trying to get on the housing ladder."

Mr Robertson says the economy isn't keeping up with population growth.

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