Economy may be going backwards

7:33 am on 15 November 2012

Continuing bad economic news is prompting forecasters to speculate the economy may have gone backwards for the first time in two years.

Retail figures for the September quarter showing a big fall in spending follow weak inflation and job numbers for the same period have been released in recent weeks.

Westpac economist Michael Gordon says there is a reasonable likelihood the economy contracted in the most recent quarter.

Deutsche Bank senior economist Darren Gibbs believes that at best, the economy failed to grow at all and possibly went backwards during the period.

He said a manufacturing survey for October due in the next fortnight will give the first indication of whether or not the economy's loss of momentum is continuing in the current quarter.

Finance Minister Bill English told Morning Report that the numbers bounce from quarter to quarter and the latest figures are not of concern.

He said the economy is as uncertain as it has been for years, and the Government will continue to focus on straight forward objectives, like getting back to surplus and rebuilding Christchurch.

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