New Zealand consumer spending could contract in the first quarter as the nation “catches its breath” after strong domestic demand in the final three months last year, the Treasury Department said.
Consumer activity is adjusting after the Rugby World Cup and stores reopening in earthquake-damaged Christchurch boosted fourth-quarter spending, the department said in a report on its website today. Fourth-quarter private consumption may have increased 1 percent, more than twice the pace the Treasury expected, and first-quarter spending may decline, it said.
Economic growth will slow in early 2012 and accelerate later in the year and into 2013 as rebuilding homes and infrastructure gets under way, the Treasury said. In February, it forecast gross domestic product will grow 2.8 percent in the year ending March 31, 2013, and today it said that forecast remains in place.
Delays in Christchurch reconstruction “suggest underlying weakness in the labor market will remain a feature until rebuilding activity gathers pace in 2013,” it said.
Growth in 2012 will be slower than predicted last year because of the stalled rebuild and ongoing risks to the global economy emanating from Europe, the Treasury said.
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