08 September 2009

New Zealand over worst of recession says prime minister

New Zealand's Prime Minister John Key said the country may be over the worst of its recession as the global economy bolsters New Zealand's business and consumer confidence.

“We’ll be growing in this quarter,” Key said.

“We’ll continue to grow more aggressively as the world recovers.”

New Zealand has experienced some buffering as falling world demand curbed exports, an important part of the New Zealand economy at 30 per cent of gross domestic product.

The New Zealand national treasury said recently the economy has probably experienced its sixth, and last, contraction in the second quarter.

“We may be out of the worst of the recession and starting to move into a growth phase,” Key said.

“While it’s encouraging the signs we are seeing internationally, this is still nevertheless a fragile recovery. We’re not completely out of the woods yet.”

Low interest rates and a two-year high in net immigration to New Zealand have boosted consumer spending and demand for houses, although the New Zealand dollar's  37 per cent gain against the US dollar in the past six months has curbed exports.

Finance Minister Bill English said last month that the government will look at policies to drive future growth by exports rather than consumption and borrowing.

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