OECD says NZ's recession will continue all of next year

26/11/2008 19:08:30

An Organisation for Economic Co-operation and Development is forecasting New Zealand's economy will remain in recession all of next year.

The OECD report says it will take lower interest rates, increased government spending and higher exports to help stimulate gross domestic product growth.

It also says despite a boost from tax cuts and a bounce back from drought, only modest macro-economic improvement in the New Zealand economy is projected until mid-2010.

It noted the year has so far seen a sharply slowing housing market, job losses, and a large current account deficit, which will take time to be resolved.

The Reserve Bank of New Zealand has cut rates by a total of 175 basis points since July to help the economy and is expected to cut by at least a further 100 basis points to five point five per cent in December.

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