The latest GDP figures this week are expected to strengthen the economy as it returns to the lockdown.
The consensus is that the economy grew by more than 1% in the three months to June, after growing 1.6% in the previous quarter.
The annual growth rate is expected to increase somewhat, given the economy. More than 10% contract In the second quarter of last year
Westpac Bank was forecasting 1.7% growth in the June quarter.
Its acting chief economist Michael Gordon said the latest figures are expected to show the strength of the housing market and consumer demand.
“We will also see, I think, to some extent the effect of the trans-Tasman bubble.
“As short as it was, it seems to have boosted areas such as air travel and retail spending, and hospitality looks strong enough for the June quarter,” he said.
Gordon said it was tempting to say that GDP numbers are old news because they lagged behind before they were released and there was a theory that lockdown had changed everything.
“But what we’ve learned about lockdowns is that they don’t change everything.
“As we relax the restrictions, activity can return very quickly.
“So if that turns out to be the case this time around, we’ll be back in time to have the same conversation we had before the lockdown.”
I think these June numbers will give us an example.
“We are looking at an economy that was running at a much higher level of activity than it had predicted a month ago, and was running against capacity constraints.”
Early indications are that the economic hit of Cowed’s latest sanctions was not as severe as it was during the Alert Level Four lockdown early last year.
Electronic card transactions, new job listings and the movement of goods all backed down after the reintroduction of restrictions in August.
However, the decline was not as sharp as last year’s April lockdown.
Gordon said Westpac’s initial forecast was for the economy to shrink by 6% in the September quarter.
“This in itself will be a very difficult reduction for the quarter, but then there will be a sharp increase in activity after that.”