[20 September/The Country]

The New Zealand economy grew the most over in two years over the June quarter. The 1 percent quarterly GDP gain was not expected by the Reserve Bank. The NZ dollar reacted, increasing by over half a U.S. cent. Economists expected the Reserve Bank to review its official cash rate if growth remained low, however it would be reassured by the economy’s underlying strength. Reserve Bank Governor, Adrian Orr, said the bank expected to keep its Official Cash Rate steady at 1.75 percent for 2019 and into 2020. Senior Macro Strategist at ANZ, Phil Borkin, said the market changed its expectations about a future rate cut following the information. Growth was still far from the regular 1 percent or more during the 2015-2016 peak. Statistics New Zealand noted the growth was across 15 of the 16 industries which contributed to the largest increase in two years. It added all eleven service based industries grew. Favourable weather increased milk production, leading to a 4.1 percent increase in the agriculture sector for the quarter.