New Zealand's economy will contract in the 12 months to March - the weakest annual gross domestic product result in 17 years, according to a survey of economists.
The economy is likely to shrink 0.2 per cent in the year ending next March 31, after expanding 3.2 per
cent in the previous 12 months, according to the average estimate of 11 economists surveyed by the New Zealand Institute of Economic Research in Wellington.
Three months ago, the same survey was forecasting 0.2 per cent growth.
New Zealand's $233 billion economy has been in a recession since the first quarter amid a global contraction that has curbed exports and stalled business investment.
Private consumption growth probably contracted for the first time since 1992 and housing investment will plunge 20 per cent, according to the survey.
Housing and business investment will also shrink in 2010, it predicts.
Economists forecast the economy will grow just 0.9 per cent in the year to March 31, 2010, according to the survey. Three months ago they predicted 2.1 per cent growth.
The quarterly survey includes the forecasts of the Reserve Bank and the Treasury Department, bank economists and independent forecasters such as the institute.
Reserve Bank governor Alan Bollard, who has cut the benchmark interest rate by 3.25 percentage points since July, has predicted a shallow recovery for the economy in 2009.
More detailed forecasts from the Treasury are due tomorrow with the release of the Government's Half Year Economic and Fiscal Update.
- BLOOMBERG
