N. Zealand economic growth defies deadly quake

New Zealand's economy grew a better than expected 0.8 percent in the March quarter, despite a deadly earthquake, data showed Thursday, sending the local dollar up to a record against the greenback. Finance Minister Bill English said the fourth quarter figures -- double the forecast 0.4 percent -- showed the resilience of the economy in the face of the February earthquake, which shattered Christchurch and left 181 people dead. The Statistics New Zealand data also revealed full year growth of 1.5 percent, also above expectations. The International Monetary Fund had previously warned that the quake, as well as a less destructive tremor in the same city in September, would hurt confidence in the country's economy. The Fund's economists said the quakes would wipe about two percentage points off economic growth this year, and the economy would only grow by about one percent. English said: "The earthquake in February was devastating for the people of Canterbury and caused major disruption to the region's economy, especially coming so soon after the previous large earthquake in September. "Today's result shows the resilience of Cantabrians and the New Zealand economy as a whole." The news sent the "kiwi" dollar almost nearly one cent higher against the US unit to around US$0.8490, its highest level since floating 26 years ago. The fourth quarter increase followed a rise of 0.5 percent in the three months to December and was the largest gain since the October-December period of 2009. Statistics New Zealand national accounts manager Rachael Milicich said the strong growth in the latest quarter was mainly due to manufacturing. "While some businesses in Christchurch were adversely affected, the vast majority were able to continue operating, and the earthquake resulted in some activity that would not normally have taken place." The sector grew 3.6 percent in the quarter, with large increases in machinery, metal products, and food and beverage manufacturing.