New Zealand Retail Sales Indicative of 'Decent' GDP Growth in March Quarter, BNZ Says
New Zealand's retail sales data for the March quarter is indicative of "decent growth" in gross domestic product for the period, but likely not as strong as the central bank's 1.1% estimate issued in February, the Bank of New Zealand (BNZ) said in a Friday report.The 0.9% seasonally adjusted increase in retail sales volumes was above the market consensus of a 0.5% rise, but missed BNZ's expectations for a 1.2% gain, according to the report.With retail sales volumes jumping 4.5% from a year earlier, the latest figures provide more evidence that New Zealand's economic recovery was gaining traction before the conflict in the Middle East erupted, the bank said.However, since retail sales volumes on a per-capita basis have only just returned to levels seen before the pandemic, and with sales remaining well below the pre-COVID-19 trend, it is a bit of a stretch to describe the latest data as outright strong, BNZ said.The dollar value of fuel sales ticked 5.9% higher quarter over quarter, largely driven by elevated prices, although the increase in fuel prices after the start of the Middle East conflict will likely reflect a lot more in second-quarter data, the bank said."This is one factor prompting us to forecast slower retail sales growth ahead," BNZ said. "As more income is redirected to pay high fuel bills, it will leave less money to spend elsewhere."
