A major international investment bank said on Friday that next year the New Zealand economy will face its biggest slowdown since the 1991 recession.
The Deutsche Bank said the economy will rebound in the final quarter of this year before taking a sharp downturn in the first two quarters of 2009.
The bank's chief economist in New Zealand, Darren Gibbs, said the economy will shrink by 0.7 percent in the current, final quarter of 2008 - its largest contraction since the 1998 Asian currency crisis, Radio New Zealand reported.
Falling petrol prices, recovery from drought and the October tax cuts will give the economy a brief boost in the lead-in to Christmas.
But a shortage of credit, falling commodity prices and a weaker housing market will see the economy contract by 1.3 percent over the course of next year.
Gibbs said unemployment will peak at 7 percent of the workforce before a recovery in world economic growth flows through to the local economy in late 2009. |
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