New Zealand GDP Expands In June Quarter

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New Zealand's recession has technically ended, but just barely.

Statistics New Zealand reported Wednesday that the nation's economy expanded by 0.1 percent for the three months through June 2009. It marked the first expansion after 15 months of contraction.

The agency noted, however, that the expansion was so small that many economists might not consider it a sign of economic recovery. Nonetheless, the expansion comes as a surprise to most economists, who had forecast negative GDP of 0.2 percent for the quarter.

For the full year ending in June 2009, economic activity contracted 1.8 percent, the largest on-year contraction since record keeping began in 1987.

The data affirms the projections of Reserve Bank of New Zealand Governor Alan Bollard, who said a patchy recovery likely began in the current quarter. The RBNZ kept the official cash rate at its record low 2.5 percent in a move Bollard said would help shield the economy from a global economic downturn.

Statistics NZ said primary industry activity increased 1.5 percent in the June 2009 quarter, driven mainly by forestry and logging which rose 8.0 percent. The increase was tied to higher exports of logs to the People's Republic of China.

Goods-producing industries contracted 0.5 percent in the quarter, with manufacturing down 1.3 percent and construction down 1.9 percent.

The volume of exports increased 4.7 percent while import volumes were down 3.8 percent.

Statistics NZ also said sales of food and other non-durable goods increased 0.8 percent.

(Market News Provided by RTTNews)