TLDR: Stats NZ has reported better-than-expected GDP growth in the June quarter, thanks largely to record-high net migration of 96,200 in the last year. The Labour Government pulled the migration lever hard over a year ago to grow nominal GDP and dampen inflation pressures. It worked. House prices are rising.
That migration surge was unleashed by the issuance in record-quick time of over 80,000 temporary work visas under the Accredited Employer Work Visa (AEWV) scheme, which we’ve learned led to hundreds of migrants being fraudulently sold these visas by barely-checked ‘Accredited’ employers.
The Government admitted yesterday it had no idea how many temporary workers were scammed or how much fraud has happened. A ministerial inquiry is ongoing and will be made public in December. There’s an election on October 14…
Total real GDP rose 0.9% for the quarter and 3.2% on average for the year, Stats NZ reported this morning. Economists had expected growth of about 0.5% and 3.1% respectively. Notably, but not importantly, growth in the March quarter was revised to be flat from a fall of 0.1%. That meant there was no ‘technical’ recession of two consecutive quarters of negative growth in the March quarter.
However, it’s clear Labour bought nominal GDP growth and momentum by pulling as hard as it could on the population lever. National did the same at various points when it was in Government. Twas ever thus in our housing market of an economy with bits tacked on.
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