NZ slashes its economic growth forecast

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WELLINGTON, Oct 6 (AFP): The New Zealand government today slashed its economic growth forecast to nearly zero and said its accounts would fall deep into the red amid the country's first recession in a decade and global financial turmoil.
The Treasury, or finance ministry, has cut its forecast for growth in the current year to March to just 0.1 per cent from 1.5 per cent forecast in May.
The economy shrank in the March and June quarters, signalling the first recession since late 1997 to early 1999.
"The dramatic scale and speed with which international financial markets have moved in recent weeks have been extraordinary," Finance Minister Michael Cullen said.
Added to swings in asset prices, the effect on the economy and on confidence had been profound, he said.
"The rainy day has arrived."
New Zealand goes to the polls on November 8 and the pre-election economic update is bad news for Prime Minister Helen Clark's government.