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Construction was a key driver of New Zealand’s economy in the first quarter but growth in the services sector and retail was soft.
Compared to the same quarter last year the economy grew by 0.6 percent. The annual rate of 2.5 percent was above expectations but Kiwibank’s chief economist says a slowdown in the services sector is concerning.
Jarrod Kerr says the lower numbers of Chinese tourists coming here, slowing population growth and a quiet housing market is putting the sector – which makes up two-thirds of our economy – under pressure.
He predicts growth in the second quarter of the year will fall to around 2 percent and push the Reserve Bank to further cut interest rates.
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