NZ economy in recession

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FE Team | Published: August 06, 2008 00:00:00 | Updated: February 01, 2018 00:00:00

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WELLINGTON, Aug 5 (Xinhua): New Zealand Treasury said today it believes that New Zealand's economy is in recession.

In its review of economic statistics for July, the Treasury said that it believes that when official data is released, it will show economy shrunk in the three months to the end of June.

A recession is defined as two consecutive quarters of negative growth.

Treasury said business activity dropped in the June quarter and household spending was expected to have fallen.

Reserve Bank Governor Alan Bollard told Radio New Zealand that the situation is making it possible to lower interest rates further.

"In a softening economy people are going to be very hesitant about price increases and things like that, so that's given us enough room to cut," he said.