By Rthvika Suvarna

SINGAPORE--New Zealand's farm-rich economy returned to growth in the first quarter, exiting the recession that has dogged it for much of last year, but further weakness can't be ruled out.

The economy grew 0.2% in the first quarter from the prior quarter, and by 0.3% from a year earlier, Stats NZ reported on Thursday.

Economists had expected quarterly growth of 0.1% and 0.2% in annual terms.

It was only the second quarter of expansion in the economy since early 2021, but was largely in line with the expectations of the Reserve Bank of New Zealand.

While the economy has returned to growth, it is expected to continue struggling in coming quarters. The RBNZ has signaled a need for elevated interest rates to continue for now, due to stubborn inflation pressures and an ongoing cost of living crisis.

In per capita terms, the economy contracted by 0.3% in the quarter, the sixth consecutive quarterly decline, highlighting a deterioration in living standards being felt across the country.

New Zealand's population grew a further 0.5% in the first quarter.

There were a range of results at industry level, with eight of the 16 industries measured expanding this quarter, Stats NZ said.

Rental, hiring and real estate services expanded 0.9% in the first quarter, while electricity generation drove a 2.9% quarterly increase in electricity, gas, water and waste services, the data showed.

Activity in construction, business services and manufacturing all contracted over the quarter.

Write to Rthvika Suvarna at

(END) Dow Jones Newswires

06-19-24 2011ET