New Zealand's economy

Rising inflation and fears of a recession

New Zealand's economy contracted in the first quarter of 2008, raising fears of a recession and adding to the general atmosphere of gloom caused by a cooling housing market, high interest rates and rising inflation. The weakening economic outlook increases the problems facing the Labour government as it seeks re-election later in 2008.

Data from Statistics New Zealand, a government agency, published on June 27th show an almost uniformly abysmal economic performance in January-March 2008. On an output basis--the government's preferred measure because it is less volatile than expenditure-based GDP--the economy contracted by 0.3% in real terms from the previous quarter. This was the first contraction since late 2005, made worse by the fact that the previous quarter's growth rate was revised down from 1% to 0.8%. The economy's performance in expenditure terms was even poorer, with real GDP contracting by 0.6% after a gain of 0.5% in the October-December quarter. ...

[Source: Breaking News from WarOnYou.com - Posted by Mint Dollar- The Federal Reserves Worst NightMare]

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