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NZ economy grows, but slower than expected

NZ economy grows, but slower than expected

(18 September 2015 – New Zealand) New Zealand's economy grew by just 0.4 percent in Q2 2015.

The NZ growth figure was weaker than market forecasts for GDP growth of 0.5 percent and the 0.6 percent rate the Reserve Bank of New Zealand (RBNZ) had expected.

Following the news, the Kiwi dollar dropped almost half a US cent.

NZ’s second quarter growth was up from the weak 0.2 percent in the first quarter, while GDP growth slumped from a 0.9 percent quarter on quarter rate in the three months to March.

On an annual basis, GDP grew 2.4%, down from a 2.7% in the year to March.

"Despite falling milk prices, we're seeing growth in dairy production," national accounts manager Gary Dunnet said.

"But over the year, agriculture is up only a little, due to dry conditions last summer."

In attempt to protect to the economy against largest drops in global dairy prices, RBNZ has already cut its official cash rate three times in around six months to 2.75%. Further, the central bank is widely expected to make another cut in October.

While both dairy and oil and gas production picked up in the June quarter, this was offset by a 1.8% fall in the transport, postal and warehousing category, due to a fall in transport activity.

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