DIGIVESTASI - New Zealand Closes 2024 with Grim Notes, On December 19, 2024, New Zealand officially announced it had entered a recession. This condition arises when a country's gross domestic product (GDP) shrinks for two or more consecutive quarters.

In New Zealand, the economy experienced a sharp decline, leading to a weakening currency. The government and opposition parties have been engaged in mutual blame over the situation.

New Zealand's GDP reportedly fell by 1% in Q3 2024 compared to the previous quarter, surpassing analysts’ predicted contraction of 0.2%. This marked the second consecutive contraction, following a 1.1% decline in Q2 2024.

In its report, Kiwibank stated that the country's economic downturn impacted most industrial sectors. However, revisions to early-year growth data slightly offset the downward trend. New Zealand has experienced a continuous six-month decline, a situation unseen even during the Covid-19 pandemic.

Economic prospects are projected to remain bleak through the end of the year. Nevertheless, Kiwibank is optimistic that Q4 2024 might mark the end of the downward trend. The report projects a 1% interest rate cut could have a positive effect in the future.

Sectors significantly affected by the downturn include manufacturing (-2.6% compared to +1.3% in Q2), business services (-1.5% compared to -0.7%), and construction (-2.8% compared to -1.6%), according to Trading Economics data.

Finance Minister Nicola Willis confirmed that the economy has contracted over the past eight quarters in total. However, she remains optimistic that conditions will improve in 2025. On the other hand, the opposition Labour Party blamed the recession on Willis' austerity policies and budget cuts. They also questioned the efficacy of these measures in addressing the situation.

Argentina’s Continued Recession

Argentina, another country recently grappling with recession, also faces significant challenges. In Q1 2024, Argentina's economy contracted by 5.1% compared to the previous quarter, following a 1.9% contraction in Q4 2023. On an annual basis, Argentina's GDP shrank by 2.1% in Q3 2024, marking six consecutive quarters of contraction.

The Argentine recession has further worsened the country's situation, which has been mired in turmoil since the enactment of economic reform packages by President Javier Milei in December 2023.

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