GDP fall a sign of 'very tricky' times ahead - Robertson

Source: 1News

Finance Minister Grant Robertson has blamed global conditions for a fall in quarterly GDP figures and is warning New Zealanders of "very tricky" times ahead.

Grant Robertson speaks on GDP figures.

Speaking to 1News, he said the 0.2% drop in GDP was a sign of the "very challenging times we've got around the world".

"The New Zealand economy is still well-positioned to deal with this, but it's going to be a very tricky 2022," he said. "We rely on our exports and that's obviously been the biggest impact in this quarter."

The Finance Minister said it was "incredibly hard to predict" whether there was going to be a recession, but that it was already a "very tough time" for many Kiwis.

READ MORE: Economy shrinks by 0.2% in first quarter, new GDP figures show

"We're well-positioned to deal with the challenges, but this is a very tough time for many businesses and households. "

Total exports decreased by 14.3% in newly-released first-quarter figures. The decrease in goods exports was driven by falls in the export of metal products, machinery, dairy, meat, agriculture, fishing, tobacco and other food products.

Meanwhile, Stats NZ reported that services exports remained "significantly affected by the pandemic and continued border restrictions".

Robertson said China's continuing elimination approach to the Omicron was affecting supply chains for New Zealand exports.

"If you look at a country like China, during the period that this is measuring, they had a number of shutdowns. There's been significant concerns about supply chains. Those things are really affecting our exporters at the moment," he said.

"We're working very hard alongside both exporters and importers to try to resolve supply chain issues. We're making sure, where we can, we see ships coming into New Zealand more quickly. But a lot of this is driven offshore, while China continues its elimination approach to Covid - it means major ports in China are closing regularly".

Opposition parties respond to fall in GDP

National's finance spokesperson Nicola Willis told 1News that the new GDP figures were a sign of "dark clouds on the horizon" for New Zealanders.

"The Government needs to present a plan that gives people certainty that we will get out of the current, very difficult economic situation," she said.

"It's my hope that the world is a better place for the New Zealand economy over the next few months - but hope is not a strategy - we need the Government to present a careful plan that means we can withstand global pressures and volatility."

Nicola Willis.

When asked how much the Government could control global conditions, Willis said there were issues it could address at home.

She said it needed to get "people off welfare and into work" to help address worker shortages for businesses, along with changing immigration settings.

New Zealand is currently experiencing record low unemployment rates, while wages increased by 3% in the March 2022 quarter.

Willis added there were burdensome costs on businesses and that the Government's "extremely high levels" of spending were causing inflation.

But on Wednesday, Robertson said the country continued to have "strong resilience" in its economy.

"We come into this with very low unemployment, very low public debt, and 5% annual growth still on the books."

Meanwhile, ACT leader David Seymour said in a statement that the country was "halfway down the road to recession".

"The Prime Minister is going to great lengths to say it’s all global headwinds, but that’s just spin. Australia’s economy grew in the same period, by 0.8%, an annualised 4% better than New Zealand," he said.

"New Zealand forecasters had a consensus of flat growth, but it was negative. Not only are we performing worse than Australia, but comparatively worse than expectations."