Recovery might be hitting wall

Last updated 07:27 18/09/2012

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New Zealand's economic recovery could be stalling, with experts dismissing the Government's plan to return to surplus in three years.

On Thursday official figures are expected to show the economy grew by just 0.3 per cent in the June quarter, far below the 1.1 per cent recorded in the first three months of the year, a period helped by bumper grass-growing conditions that boosted dairy volumes.

There is an outside chance that the economy could have contracted during the period, with BNZ economists forecasting a 0.1 per cent decline.

BNZ head of research Stephen Toplis said the first two quarters would still show growth of 1.0 per cent.

The bank expected growth to pick up slightly by the end of this year, but Toplis conceded this may prove to be optimistic.

"It would be fair to say that we have become somewhat disconcerted about some of the sector indicators that do start to question those forecasts," Toplis said.

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- © Fairfax NZ News

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