NZ exits recession but economy still plagued by high rates

New Zealand’s economy exited recession with modest expansion in the first quarter.

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Gross domestic product (GDP) gained 0.2 per cent from the previous quarter, when it declined 0.1 per cent, Statistics New Zealand said on June 20. Economists expected 0.1 per cent growth.

GDP rose 0.3 per cent from the year-earlier quarter, beating the 0.2 per cent estimate.

The economy is struggling as the Reserve Bank of New Zealand (RBNZ) keeps its key interest rate at 5.5 per cent, the highest since 2008, to bring inflation back under control. While strong immigration and a tourism recovery are aiding activity, steep borrowing costs are curbing consumer spending and business investment.