Interest rate rises later this year could cause a second dip in the economy, the New Zealand Institute of Economic Research warns.
Despite retail and housing market figures are providing evidence the economy is recovering from the downturn, the institute's principal economist Shamubeel Eaqub warns the road to recovery might not be a smooth one.
The economy could experience a second dip when the Reserve Bank begins raising interest rates from their record lows later this year, he says.
And consumer and business confidence could also be affected when governments worldwide start withdrawing billions of dollars in stimulus measures put in place to help stem the financial crisis.
