2 Mar 2009

Recession in Australia seen as dire for NZ

12:44 pm on 2 March 2009

New Zealand Prime Minister John Key warns a recession in Australia could have dire consequences for New Zealand.

Mr Key is in Australia for an annual meeting of trans-Tasman leaders.

The ABC reports he said New Zealand is already in a shallow recession and the strength of its economy is dependent on the Australian economy.

"Firstly, about a quarter of all our exports go to Australia, so any recession would obviously likely dampen that demand," he said.

"Secondly, you're our largest destination in terms of tourists coming over to New Zealand - about 1 million tourists a year coming out of Australia.

"You're the home of a huge amount of foreign direct investment into New Zealand - again very, very large numbers."

New Zealand is in recession after experiencing three consecutive quarters of negative growth.