New Zealand's economy shrank 0.2 per cent in the first quarter of the year - a measure that technically puts us halfway to recession.
Recessions are typically defined as two successive quarters of economic contraction.
But economists don't think this is the start of a recession ... yet.
"We expect to see a bounce-back in activity over the second quarter," said Kiwibank chief economist Jarrod Kerr.
"The reduced impact of Covid and the reopening of the borders will see an improvement in tourism-related industries and a fall in absenteeism," he said.
"We expect growth to average 0.6 per cent over the first half of the year. We're not in a technical recession. But the outlook for the Kiwi economy has softened."
Other economists agreed - half-year growth forecasts remained largely unchanged.
The issue, for now, is still Covid and the timing of its peaks and troughs.
"Noise, noise, noise and more noise sums up New Zealand's GDP data," said BNZ head of research Stephen Toplis.
"Fluctuating levels and variations of Covid, accompanied by equal volatility in Government-imposed restrictions have completely messed up New Zealand's GDP track over the last four quarters (not to mention those prior)."
"We reckon it will not be until we receive the news about the September quarter, which will be released in late December, that we will get a meaningful sense of how the economy is performing at the aggregate level."
The main reason for the first-quarter decline was clearly disruption to activity from the Omicron outbreak, particularly in the latter half of the quarter, said Ben Udy at Sydney-based Capital Economics.
"Admittedly, the 1.4 per cent fall in manufacturing activity and the 8.9 per cent decline in mining activity were not due to the Omicron outbreak," he said.
"But the disruption due to Omicron can be seen in the 1.9 per cent fall in retail services activity and the 2.7 per cent decline in transport services."
While growth fell, the probability of a technical recession in the first half of 2022 was low, he said.
"Retail sales have already rebounded 10 per cent from their recent trough in February. What's more, the gradual reopening of the border from the end of March should provide a shot in the arm for services exports and the tourism sector."
That is the good news.
The bad news is that this contraction is likely just a taster for more serious economic pain to come over the coming 12 months.
"It is the outlook into 2023 that has us worried," Kiwibank's Kerr said.
"We're expecting growth to half into 2023, under the weight of rising interest rates and a falling housing market. Both consumer and business confidence are in the doldrums already."
There's no escaping the fact that today's data was worse than expected.
Market consensus was for growth of around 0.6 per cent - although a few economists snuck in last-minute downgrades to pick a flat result.
The first quarter fall followed a 3 per cent rebound in the last quarter of 2021 following the relaxing of Covid-19 restrictions after the Delta outbreak.
From the first quarter of 2021, growth is up 1.2 per cent, just half the 2.4 per cent forecasts by economists.
As sharemarkets crash into bear territory and the slide in residential property prices gathers momentum, confidence is leaking from the economy.
"Looking further ahead, the outlook is getting bleaker," Udy said.
"Confidence has already slumped largely due to rising inflation and interest rates. While we think inflation is around its peak, we expect the RBNZ to raise the OCR aggressively over the rest of this year. And house prices are now plummeting."
ASB's Nathaniel Keall was also wary about the longer-term outlook.
"Higher interest rates, ongoing cost pressures, slowing construction, softer agriculture production and more cautious households will remain big themes over the remainder of 2022 and much of 2023," he said.
But Keall warned about getting too pessimistic.
"The economy isn't on the brink of caving in," he said.
"We could take some comfort from New Zealand's favourable terms of trade and the constructive outlook for our export sector."
Historically low levels of unemployment also provide the economy with some buffer against tightening conditions.
"Nevertheless, we see growth slowing to circa 1-2 per cent over 2022 and 2023 in contrast to the whopper 5.4 per cent lift we expected last year," Keall said.
Westpac chief economist Michael Gordon noted that, while the result was weaker than the Reserve Bank had forecast, it was unlikely to trouble the central bank.
"The RBNZ's aim is to better align demand with the economy's potential in order to bring inflation pressures under control. A modest fall in activity would actually be helpful in that regard, as long as it happens in a controlled manner."
In fact it reduced the odds that the OCR would need to go as high as the 4 per cent that the RBNZ was projecting (we expect a peak of 3.5 per cent by the end of this year), he said.