New Zealand probably avoided recession in the first half of the year with GDP figures for the June quarter likely to show the economy grew - just.
But with a great deal of uncertainty around the figures - due this Thursday at 10.45 - it would be foolhardy to rule recession out.
Bank economists from ANZ and Westpac take divergent views of the data we've seen to date, with the former picking a downbeat 0.4 per cent growth figure and the later forecasting 1.6 per cent growth.
"Consistent with an economy that's run out of resources (particularly labour) to grow, leading activity indicators going into the Q2 GDP data have been pretty feeble," ANZ senior economist Miles Workman said.
Activity indicators from business and consumer surveys had been very soft as had retails sales and manufacturing data, he said.
Only the construction sector had continued to outperform expectations.
But Westpac chief economist Michael Gordon highlighted the reopening of the border, and the resumption of overseas tourism, which he expected to provide a significant boost to areas such as travel services, accommodation, and arts and recreation.
"A result in line with our view would emphasise that the New Zealand economy remains far from recession. Indeed, the challenge is one of an economy that is running too hot," he said.
But Gordon acknowledged the margin of uncertainty was "particularly large this time".
"There were some big forces operating on the economy through the June quarter – not just the easing of the Omicron wave, but also the scaling back of the Covid response," he said.
"We're expecting to see some big sectoral shifts in both directions, and it's not at all clear where the balance will lie."
ASB economists have forecast a more moderate 1.2 per cent growth for the quarter.
"If our forecast (or thereabouts) is accurate, the New Zealand economy has now clawed its way back to its pre-August 2021 lockdown level of output," said ASB senior economist Nathaniel Keall.
However it had taken 12 months to do so, in contrast to the spectacular bounce-backs we saw after the 2020 lockdowns, he noted.
"In short – and in case it wasn't already obvious – we are well and truly in an
environment of slower growth."
Growth was set to slow further, with severe capacity constraints, painful cost pressures, higher interest rates, weaker global growth and a cooling housing market all persistent themes, he said.
"But the economy isn't on the brink of collapse either: we still see scope for a re-orientation in growth towards the external sector, and we expect domestic demand to prove comparatively resilient."
One thing all the economists agree on is that GDP growth for the quarter won't be as strong as the Reserve Bank forecast of 1.8 per cent.
The persistence of the Omicron wave ensured we won't get a bounce back that strong.
But as ANZ's Workman points out, even a miserly 0.4 per cent result won't be enough to change the monetary policy path for the RBNZ.
"Importantly, weak (or even negative) growth doesn't necessarily mean the RBNZ can afford to call a halt to monetary tightening any time soon," he said.
"An over-stimulated economy bumping into capacity limits will always hit the wall at some point, and it looks like that wall is well and truly here.
"Given current wage and consumer price index inflation pressures, and what the business survey data continue to say about labour scarcity, a significant downside surprise to the RBNZ's August MPS forecast probably doesn't mean a lot for OCR settings."