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New Zealand may already be in recession: Trea -

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New Zealand may already be in recession: Treasury

Broadcast: 05/08/2008

Reporter: Tony Jones

The New Zealand Treasury Department says it is already too late to avoid a recession. A Treasury
Report forecasts the New Zealand economy will contract for the second successive quarter.

Transcript

TONY JONES, PRESENTER: And while the Reserve Bank attempts to maintain its highwire act over the
Australian economy, in New Zealand the treasury says a recession is already underway.

While official figures for the second quarter are not due to be released until next month, a
treasury report forecasts the New Zealand economy will shrink by between a half and three quarters
of a per cent.

That would be the second successive quarter of contraction, following a 0.3 per cent fall for
January to March. The downturn has been blamed on a drought which has affected farm production.

If the prediction proves correct New Zealand would become the second OECD country to slip into
recession this year after Denmark.