( AFP / ANTHONY WALLACE )
New Zealand entered recession in the third quarter, according to official data released Thursday, as the economy suffered a sharp and unexpected fall that sent the country’s currency tumbling.
Gross domestic product (GDP) fell by 1.0% between July and September compared to the previous three months, which is larger than expected, while analysts had predicted a contraction of 0.2%.
This is the second consecutive quarterly contraction of the year, following a revised 1.1% decline in April-June.
A country is considered in recession after two consecutive quarters of contraction.
Excluding the Covid-19 pandemic period; The New Zealand economy is experiencing its weakest half since 1991.
However, the recent decline was partially offset by an upward statistical revision to growth earlier in the year, according to a report from Kiwibank Economics, an analysis center owned by New Zealand’s Kiwibank.
The last quarter could thus be the last of the decline cycle, and the 1% reduction in interest rates during the quarter should provide relief going forward.
The New Zealand dollar was trading late in the afternoon at 0.5626 USD, a drop of around 1.8% compared to the day before, the extent of the collapse having surprised traders.
The country’s economy has been teetering on the brink of recession for months, with consumer morale hit by rising prices, high borrowing costs and the housing crisis.
New Zealand was previously officially in recession between October 2022 and March 2023, and then again between July and December 2023.
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