Official figures confirm New Zealand was in recession for the first half of this year.
Statistics New Zealand says Gross Domestic Product fell by 0.2% in the June quarter, following a contraction of 0.3% in the March quarter.
Households were the biggest contributor to the decline with a fall of 0.3% in consumption following a 0.4% fall in the March quarter.
A contraction for two consecutive quarters is the technical definition of a recession.
The last time New Zealand was in recession was the second half of 1997 after the Asian currency crisis and drought.
It continued into a third quarter of negative growth in the first three months of 1998.
Eight out of nine economists polled by Radio New Zealand expect the current recession to follow a similar timeline and last three quarters.
OCR cuts expected
Deutsche Bank chief economist Darren Gibbs expects more cuts in the Official Cash Rate.
He says the crisis on financial markets will see the Reserve Bank cut interest rates by another half a percentage point, before easing and cutting another 25 basis points in December.
The OCR is currently 7.5%. It was reduced from 8% on 11 September.
Meanwhile, Finance Minister Michael Cullen says the recession is not over yet - he says it is almost certain that economic activity fell in the nine months of 2008 to date.
But he expects tax cuts coming into effect on 1 October and lower petrol prices will help boost economic growth in the last three months of the year.
