Latest figures have officially confirmed the recession in New Zealand.

Figures released on the 26th of September show a GDP shrink of 0.2 percent for the June quarter of 2008. Combined with the March quarter drop of 0.3 percent, the technical definition for an economy in recession, two consecutive quarters of economic falls, has been met.

The cause of the second quarter of contractions has been pinned to tightened credit conditions, lowered domestic spending and a draught affected agricultural industry. It has been forecast by analysts that these conditions will continue for at least the following September quarter. A recent report by the New Zealand Institute of Economic Research forecasts the September fall to be 0.1 percent. Similar reports from the Reserve Bank predict a drop of 0.3 percent, while the Treasury has merely stated that they are “not ruling out a further small fall”.