MNI BRIEF: NZ Q2 GDP Contracts 0.9% Q/Q

New Zealand’s economy contracted 0.9% q/q in Q2, sharply undershooting the Reserve Bank of New Zealand and market expectations for a 0.3% decline, official data showed Thursday. 

The fall followed a 0.9% rise in Q1, leaving GDP down 1.1% y/y in the year to June 2025. Expenditure on GDP dropped 0.9% in Q2 after rising 1.2% in Q1, and fell 0.6% over the year. Manufacturing was the largest drag, down 3.5% on weaker transport equipment, food, and metal products, while construction fell 1.8%.

By contrast, information media and telecommunications rose 1.8%, wholesale trade gained 1.4%, and rental and real estate services climbed 0.7%.

RBNZ Chief Economist Paul Conway told MNI last month the Official Cash Rate could move below the projected 2.5% level by March if global trade disputes slow economic growth more than expected. (See MNI INTERVIEW: RBNZ's Conway Sees Lower OCR On Weak Growth)