New Zealand sinks into recession, more rate cuts coming

New Zealand’s economy plunged into recession in the third quarter, with GDP dropping 1.0% from the prior quarter, leading to increased expectations of more aggressive rate cuts by the Reserve Bank of New Zealand. The sharp decline in economic activity, particularly in manufacturing, utilities, and construction, was exacerbated by high inflation and reduced spending. Despite hopes for a recovery, analysts are cautiously optimistic as the central bank continues to lower borrowing costs, with signs of demand slowly picking up in December.

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