The quarterly GDP data were out on Thursday. Quite how one reads them probably depends on bit on where your focus lies. To the extent that the focus is on squeezing out inflation then any data that points to excess demand dissipating a bit faster is mostly a good and welcome thing. The sooner inflation is back to around 2 per cent, after three years away, the better.
On the other hand, real GDP per capita is the average real incomes of New Zealanders. And since not only did real per capita GDP fall in the September quarter but some other recent quarters were revised down there is the gloomy side to the story as well.
I put this chart on Twitter on Thursday
Looking back over recent recessions in New Zealand, real GDP per capita has already fallen by almost as much as it did in the 2008/09 recession. It isn’t that headline GDP is plummeting, but record non-citizen immigration inflows means the population has been growing at a rate not seen since 1947. This chart is from a BNZ report.
But how has per capita real GDP growth (or lack of it) here compared to the experiences of other OECD countries? The OECD doesn’t yet have quarterly per capita data for all member countries, but here is what they do have.
This chart shows the increase/decrease in real per capita GDP from 2022Q3 to 2023Q3. About half the countries have experienced falls in real GDP, but New Zealand’s has been the second largest fall (I’m guessing Estonia is an energy-shock effect).
And here is the cumulative change for the same group of countries from just prior to Covid (2019Q4) to now (2023Q3)
Less bad of course, but (a) less growth than the median country, and (b) bar Iceland, all the countries with a worse performance than New Zealand were severely hit by the gas price/supply shock after the invasion of Ukraine (I’m not sure what the Iceland story is, but I checked the Icelandic statistics office website and the numbers appear to be correct).
It is a far cry from the stories we used to hear - backed by data - a year or two back about the initial post-Covid rebound having been fairly strong, by international standards, in New Zealand.
croaking cassandra 
“Looking back over recent recessions in New Zealand, real GDP per capita has already fallen by almost as much as it did in the 2008/09 recession.”
Considering the fiscal consolidation hasn’t even started yet, the first graph you show is truly a shocker!
Although these figures are shocking, they were also not actually surprising, as contradictory as this may sound. The figures simply confirmed what I already believed to be the New Zealand’s actual economic performance over the past two years.
Looking for silver linings, inflation should fall more quickly, given this appalling economic performance. There are, of course, still upside risks. Councils driving up rates by over 20% per annum is just one of these.
To expand more generally, I would say that the biggest silver lining in the otherwise dark past two years has been the growth of the samizdat style alternative media, which gives me some hope for the future. During the Covid Cult, the bought and paid for legacy media had an almost complete monopoly on information, and used this strangle hold on the public to relentlessly publish far-left government propaganda.
Of course, not only are the legacy media biased, but they are also completely incompetent. I turned on OnePravda to see what their commentary about the GDP figures. Their “expert” explaining the numbers was someone called Katie Bradshaw. Really? Sigh. I turned it off.
This blog, and others like it, are very refreshing to read. I’ve quite like Robert MacCulloch’s blog as well. Neither of these blogs are mindlessly partisan like left-wing shills are – both have criticized the National Party. I always look forward to your posts. Reading analysis by proper economists, rather than reading the reckons of a ragtag collection of looters, moochers and grifters on legacy media, is a huge relief.
So, I’d like to thank you for your blog. It’s top-notch.
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Sorry correction Katie Bradford was her name. Doesn’t matter.
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Gee, I wonder what Costa Rica’s secret is?
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Article 12 of the Constitution has forbidden a standing army since 1949, following the Costa Rican Civil War. It may be related to absense of defence expenditure.
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Iceland is very small, smaller than Christchurch, and it’s economy is very fluky. Probably this is to do with massive tourism decline during Covid. Aluminium and fish are the other two pillars of its economy.
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They had a very sharp fall in just the last quarter.
(Take your point on size, altho it is a bit rich coming from NZers; our country being smaller than many OECD major cities)
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About size: Singapore is about the same size as lake Taupo, though ,unfortunately not economically
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Michael, You said the Falkland Islands had a high(er) GDP/Capita than us [?].
That is the lifestyle I (and many NZrs) were accustomed to not a population Ponzi economy?
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