Four successive quarters of growth is a welcome sign the economy is continuing to recover, but more work is needed to ensure the rebound in jobs and growth is sustainable, Finance Minister Bill English says.

GDP data issued today shows the economy grew by 0.6 per cent in the March quarter, broadly in line with expectations. In addition, growth in the December quarter was revised upward from 0.8 to 0.9 per cent, taking annual real GDP growth to 1.9 per cent.

Quarterly growth was led by a continued rebound in the manufacturing sector.

"The continuing recovery is good news. A growing economy is the only way to create new jobs and raise New Zealanders' living standards," Mr English says.

"The Government has put in place a range of policies to lift sustainable economic growth and they are having an effect, with 170,000 new jobs forecast over the next four years in Budget 2010.

"But the economy still faces serious challenges. We need to continue tilting the economy towards savings, exports and productive industries and away from the rampant growth in government spending and borrowing for housing and consumer spending seen under Labour.

"Budget 2010 took concrete steps in this direction. This is the only way to ensure sustainable growth - and is vital if we want to raise the competitiveness of our exporters, lift business confidence, increase jobs and incomes and help New Zealanders get ahead.

"While the global outlook has strengthened in the past year, it remains fragile, as we can see from the sovereign debt crisis in Europe.

"This reinforces the need for continuing restraint in government spending and curbing the significant increase in New Zealand's debt to the rest of the world.

"We capped new operating spending at $1.1 billion in Budget 2010 and will increase the new spending allowance by just 2 per cent a year in future budgets," Mr English says.

(Source Beehive)