New Zealand enters technical recession after economy shrank 0.1% in the first quarter

New Zealand's gross home merchandise fell 0.1% successful the archetypal quarter, according to authorities information published Thursday, arsenic its cardinal slope embarked connected 1 of the astir assertive complaint hike cycles successful the world.

The latest information from Wellington marks a method recession for the economy, aft reporting a revised 0.7% decline successful the last 4th of 2022.

A method recession is defined arsenic 2 consecutive quarters of contraction.

Compared with a twelvemonth ago, the system grew 2.9% successful the archetypal quarter. Economists surveyed by Reuters expected New Zealand to people a contraction of 0.1% 4th connected 4th and maturation of 2.6% twelvemonth connected year.

In its May meeting, the Reserve Bank of New Zealand raised its benchmark complaint to a 14-year high, with the 25-basis-point hike lifting its official currency complaint to 5.5%.

"New Zealand's system is successful the midst of a necessary, policy-induced slowdown pursuing the beardown post-pandemic recovery," the International Monetary Fund said successful a Wednesday ngo connection up of the GDP release.

The IMF besides warned against the cardinal slope turning to monetary argumentation easing measures, adding that it should inactive permission the doorway unfastened for much complaint hikes ahead.

"As non-tradable ostentation persists, determination is small scope to little the OCR for a prolonged period," the IMF wrote.

"A reignition of demand, including owed to insufficient fiscal consolidation, and a stalling of ostentation supra people would telephone for further tightening of monetary policy," it said.

This is simply a breaking quality story. Please cheque backmost for updates.