Thursday, 21 June 2012

Agriculture boom behind rising GDP

The NZD is down slightly after passing the US eighty cent mark for the first time in weeks, following positive GDP figures.
Agriculture is at its highest level in five years with good grass growth fuelling milk production.
It's helped push GDP, up 1.1 %, nearly three times higher than officials predicted.
Farmer Graeme Stuart says the agricultural sector has had a massive impact on New Zealand's economic climate.
 "It has been a very good season from pretty much woah to go. Milk is 26 to 27 percent of New Zealand's income."
Last year's first-quarter gross domestic product figure was more than twice the market's expectation when first released, though it was subsequently revised.
This year the department has removed and then added back one quarter to 2008's deep recession.
Darren Gibbs, chief economist at Deutsche Bank, said he struggled to see how the economy grew such apace in the first quarter of this year.
"By looking at other sources of data, nothing suggests the economy is doing okay," he said.
"The Reserve Bank will be more circumspect in how it interprets this."
Statistics New Zealand put much of the gain down to bigger agricultural production after the stellar growing conditions, with the agriculture, forestry and fishing sector growing 2.1% to $2.12 billion.
Since the end of 2011, dairy prices have been falling on Fonterra's online trading platform, and the exporter recently trimmed its forecast payout to farmers as a resiliently high kiwi dollar erodes the value of overseas sales.
BNZ's Steel said those growing conditions probably will not be repeated, and there will be some impact as that effect washes through the annual numbers.
The manufacturing sector rose 1.8% to $4.72 billion as greater milk production stoked output of dairy products. Food, beverage and tobacco manufacturing climbed 3.2%.
Figures yesterday showed the current account deficit widened deficit of $2.8 billion in the quarter on weaker dairy prices and a drop off in visitors after the Rugby World Cup.
There was a $416 million build-up in inventories due to greater manufacturing and a decrease in exports.
Original Article Here

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