New Zealand's Treasury Says Economy Probably Recovered From Recession

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New Zealand's economy probably recovered from the recession in the current quarter ending September due to improved global conditions, higher migration and increasing business and consumer confidence, the Treasury said in a report Monday.

"A small decline in real gross domestic product in the June quarter is likely to represent the last quarter of contraction in the current sequence," it said in a latest report.

New Zealand's economy has been contracting since the beginning of 2008. The Statistics New Zealand is due to release second quarter GDP data on September 23.

Moreover, the Treasury said the New Zealand dollar accelerated 21% during July and August, higher than the budget forecasts. It added that a strong dollar may limit the gains from the recovery in overseas demand.

Net migration has risen, and is likely to rise further. It is also one factor, alongside the improved global outlook and higher confidence, which will lead to an upward revision in Treasury's forecasts for the half year update.

"However, the composition of growth may mean that stronger growth will prove unsustainable. In addition, with tax revenue behind forecast, a stronger economic outlook may have a more limited impact on the fiscal position."

The Treasury said international data point to an improved global outlook, but still fragile recovery.

New Zealand's economy probably recovered from the recession in the current quarter due to improved global conditions, higher migration and increasing business and consumer confidence, the Treasury said in a report Monday. (Market News Provided by RTTNews)