Economy 'pretty resilient' Robertson says amid talks of recession

Source: 1News

Finance Minister Grant Robertson has remarked New Zealand's economy is "pretty resilient" in the face of speculation the country is heading for a recession.

He told Breakfast "most economists" aren't predicting a recession right now.

"We've got very low unemployment and low public debt," Robertson explained.

"We are in a strong position but I recognise it's pretty tough out there for a lot of families and households at the moment."

READ MORE: Ardern optimistic New Zealand economy can avoid recession

New Zealand's gross domestic product (GDP) fell by 0.2% in the March quarter, but economists are predicting it won't fall for the second quarter in a row to trigger a recession.

The prime minister has said she is optimistic the economy can avoid a recession.

However, Craigs Investment Partners' Mark Lister told 1News earlier this month that a recession in New Zealand was "definitely possible".

"Fifty-fifty absolutely. We just don't know. It'll come down to whether the inflation we're seeing at the moment comes off in the next six to 12 months."

Although he has earlier remarked the fall in GDP is a sign of "very tricky" times ahead, Robertson told Breakfast New Zealand has "good prospects".

Despite record low consumer confidence and high interest rates, the finance minister denied accusations he was wearing rose-tinted glasses.

"We continue to export our goods to the world," Robertson remarked to presenter Matty McLean. "You mention the EU free trade deal. That's exactly the kind of thing we're trying to push for there.

READ MORE: Record low consumer confidence not unexpected: Robertson

"None of that takes away though Matty from the fact some people are doing it tough and that's the reason why the Government has stepped forward with the kind of support that we have."

Robertson mentioned the cost of living payment totalling $350 for people earning under $70,000 a year. He also spoke about increases to the minimum wage, superannuation and other benefits which came into force in April.

"We think that's the best way of supporting New Zealanders through this period. Plus getting some real competition into our grocery sector…If we can support New Zealanders and get a more competitive grocery market, then New Zealanders will see prices much more affordable at the supermarket."

Robertson said with economic activity "reasonably solid" thanks to the country's borders reopening, the June quarter will likely see some growth.

However, he did acknowledge high levels of inflation are ongoing around the world, driven by supply chain constraints and the war in Ukraine.

"Every country in the world is grappling with this at the moment," Robertson said.

"New Zealand is as well placed as anybody to deal with it because we did come through Covid strongly with our economy. We kept people in work, we looked after our businesses, now we all have to keep going together and make sure we do grow the economy in a sustainable way."