3. Question No. 3—FinanceINGRID LEARY (Labour—Taieri) to the Minister of FinanceQuestion No. 3—Finance3. INGRID LEARY (Labour—Taieri) to the Minister of Finance: What recent reports has he seen on the New Zealand economy?Hon GRANT ROBERTSON (Minister of Finance): Last week Statistics New Zealand reported that GDP edged down by 0.1 percent for the March quarter following a 0.7 percent decline in the previous December quarter. On an annual basis the economy was 2.9 percent larger than a year ago and is 6.7 percent bigger than before the start of the pandemic ahead of most of the countries with which we compare ourselves. We know that 2023 is a challenging year for the New Zealand economy and New Zealand households as global growth slows and the North Island weather events disrupt households and businesses. The decline in growth over the last two quarters is characterised as a technical recession. It does need to be viewed in the context of a record number of New Zealanders in work and wages rising at a faster pace than inflation which is not typical of recession conditions. We are well positioned to support New Zealanders through this tough time with cost of living support and dealing with the impacts of weather events. Unemployment however does remain low there has been a rebound in tourism and international students and public debt levels are among the lowest in the OECD.Ingrid Leary: What was the impact of the North Island weather events on the GDP numbers in the March quarter?Hon GRANT ROBERTSON: The impact of the Auckland floods and Cyclone Gabrielle saw declines in primary production manufacturing and transport postal and warehousing activity. New Zealand's economists have said that headline growth would likely have been positive in the March quarter if it wasn't for the cyclone. They said that the rise in immigration and fiscal support could support momentum and growth in the economy over the second half of the year. Westpac's economists said the results show that the economy is in a transition phase rather than in outright recession."Ingrid Leary: How will the Government manage the response to the economic outlook?Hon GRANT ROBERTSON: Economic activity has been affected by the North Island weather events. Looking ahead the Reserve Bank is forecasting that the recovery and rebuild from these events will add about 1.5 percent to GDP spread over a number of years. The Government will have a part to play in the recovery as New Zealanders would expect us to. The cost of asset damage from the weather events is estimated at between $9 billion and $14.5 billion with half of that related to infrastructure owned by central government or local government such as roads. We are committed to supporting New Zealanders with the cost of living pressures and to investing in essential public services as well as the work we need to do to help these regions recover and rebuild.Ingrid Leary: What other reports has he seen on the New Zealand economy?Hon GRANT ROBERTSON: We do see reports that show the resilience of the New Zealand economy. This week it was the BNZ-Business New Zealand Performance of Services Index or the PSI with a reading of 53.1 in May close to the long-term average for the survey. A reading above 50 indicates that the sector is generally expanding while below 50 indicates that it is declining. Sales new orders and employment all expanded. BNZ's economists said the result indicated that the economy would grow modestly in the June quarter. As I've said previously this is a tough period for New Zealanders but our economy is resilient and we are building for the long term to deliver higher-wage jobs and lower emissions."