23 Mar 2009

Economy likely to have contracted sharply in last quarter of 2008

7:03 am on 23 March 2009

Economists are predicting figures out this week will confirm the economy experienced its sharpest contraction in 2008 in the last three months of the year.

Most are predicting gross domestic product for the fourth quarter will fall 1.1%, higher than the Reserve Bank forecast of a 0.8% fall. The actual figure will be released on Friday.

BNZ senior markets economist Craig Ebert says manufacturing and the construction sector will look particularly dismal and most other sectors will be flat to negative.

Consumer spending and some areas of the service sector may be holding up better, he says.