Business

NZ's economy gets boost from rugby World Cup spending

New Zealand rugby team with World Cup Image copyright AFP
Image caption New Zealand had to wait 24 years to win the rugby World Cup

New Zealand's economy expanded at a faster-than-expected rate in the third quarter, boosted by spending at the rugby World Cup.

Gross domestic product (GDP) rose a seasonally adjusted 0.8% in the July-September quarter, the statistical office said.

That is up from 0.1% in the previous quarter.

The World Cup helped offset many problems caused by the earthquake that hit Christchurch earlier this year.

"Activity in the retail, accommodation, and restaurants industry was certainly boosted by the rugby World Cup. New Zealanders and visitors to New Zealand both contributed to that rise," said Rachael Milicich of the statistical office.

"The big mover in manufacturing was from food, beverage, and tobacco, which had its biggest rise since 2002."

Household consumption was up 1.5%, posting the largest increase since early 2007.

Tougher year?

Stronger manufacturing, consumption and fishing and forestry numbers helped offset weakness in the construction, agriculture and wholesale industries.

However, analysts said the boost from the World Cup would diminish in coming months, a factor that would be compounded by weak global economic conditions.

They warned that New Zealand may feel the impact from the ongoing European debt crisis and the sluggish recovery in US economic growth, and as a result interest rates would probably remain low for much of the coming year.

"We can expect a softer run of GDP numbers over the next few quarters as the rugby World Cup impact washes out of the data," Mark Smith, an economist at ANZ National Bank, was quoted as saying by the Bloomberg news agency.

"We continue to look for a December 2012 start to the tightening cycle, barring a global meltdown."

The NZ dollar and the country's main stock market were little changed on the news.

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