New Zealand economy sees Q4 growth, avoids recession

| March 24, 2011 | 0 Comments

Statistics New Zealand has today revealed the economy avoided recession after growing by 0.2% in the October to December period.

The fourth quarter growth follows a contraction of 0.2% in the third quarter and takes the annual rate of growth to 1.5%.

Two consecutive quarters of negative growth would have pushed the economy into another recession.

However, fears remain for the economy as growth is expected to slow in the first quarter of the year as it attempts to rebuild itself after an earthquake hit Christchurch on 22 February.

Earlier this month, the country’s Finance Minister Bill English warned that the earthquake will impact negatively on economic growth.

Mr English believes the 6.3 magnitude quake could push the nation into recession as Christchurch, which is New Zealand’s second largest city, accounts for approximately 15% of the country’s economy.

In an effort to boost growth, the Reserve Bank of New Zealand recently lowered interest rates to 2.5%.

At the time, the central bank said the move was a “one-off” but it will be guided by economic data.

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