7 Apr 2010

Recession effects still expected for some time - Treasury

6:11 am on 7 April 2010

A monthly summary of New Zealand economic indicators by the Treasury says that while the economy is recovering slightly more strongly than earlier predicted, the effects of the recession will be felt for some time.

The update says confidence readings point to an ongoing recovery in the economy, but the rate of growth in the March quarter may not be as strong as in December.

Treasury says a boost in commodity prices is expected to boost New Zealand's terms of trade significantly, but the current account deficit is expected to widen to over 6% by the end of next year.

And it warns the economy remains vulnerable to future shocks because of its high debt position, despite a recent fall in the current account deficit.