New Zealand's economy surged ahead in the third quarter as consumers spent with abandon while homebuilding and tourism boomed, cementing expectations the country's central bank was done cutting interest rates. Official data on Thursday showed gross domestic product rose 1.1 percent, above economists' forecast of a gain of 0.9 percent, putting it among the rich world's fastest-growing nations.
It was the fifth straight quarter of growth at 0.7 percent or more for the island nation of 4.7 million and took the annual pace of expansion to a rapid 3.5 percent. Much of the country's success was simply due to having more people. A record influx of migrants has lifted population growth to a blistering 2.1 percent - almost three times that of the United States.
More people means more spending on everything from education to health and an ever-rising demand for housing, which has heated home prices across the country. The upbeat data should give the Reserve Bank of New Zealand (RBNZ) further reason to not lower interest rates when it meets in February, even as inflation and wages growth remain subdued. The RBNZ has already slashed interest rates three times this year to a record low 1.75 percent to help stoke inflation, which, at just 0.2 percent sits well below the bank's target band of 1 to 3 percent.