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Source: ONE News -
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Figures released on Friday show New Zealand's gross domestic product has dropped for the fourth quarter in a row, a trend not seen since 1990.
GDP, a key economic indicator, now sits at 0.9% for the three months to December 2008, according to Statistics New Zealand.
The last three quarters all recorded GDP figures under -0.5%.
GDP for the December quarter was driven down by declines in the manufacturing and wholesale trade industries but was partly offset by finance, insurance and business services, which were up 2.2%.
On an annual basis, GDP was up 0.2% for the December 2008 year despite its four quarters of decline.
Statistics New Zealand says this was because the New Zealand economy grew at a faster rate in 2007 than it contracted in 2008.
Not as bad as predicted
Economists had been predicting a gloomy GDP result, despite the Reserve Bank's forecast in December of three or four quarters of subdued growth in 2009.
Before the announcement, ANZ National senior economist Cameron Bagrie said ANZ National was predicting negative growth of 1.2%, taking year-on-year growth down to 2%.
Technically, a recession is defined as two consecutive quarters of economic contraction.
"Discouragingly, this one has already lasted four, and we're yet to see the flow-on impact of what's happening around the globe, so by all accounts we expect to see six negative quarters of GDP," Bagrie said.
Bagrie believes any recovery in the second half of 2009 is looking "pretty tepid".
"With unemployment rates still expected to move up through 2009, I don't exactly expect it's going to feel like much of a recovery, even though technically we should be coming out the other side mid year," he said.
Bagrie said the Reserve Bank is looking for a sharp V-shaped recovery in the second half of 2009. However, he said other economic indicators such as low consumer and business confidence and a drop-off in building consents suggest that this will be unlikely.
Household expenditure and housing investment down
Along with GDP, Statistics New Zealand also released gross domestic expenditure, which was down 0.6% in the December quarter.
Household spending on durables - such as cars, furniture and appliances - and non-durables such as food, were down.
Household consumption figures - the amount spent by households on good and services - were flat.
Gross fixed capital formation, which measures capital investment in fixed assets, was down 5.3%, driven mainly by the decline in residential building (-14%), and plant, machinery and equipment (-4.8%).
