With two quarters of negative growth, the country is now in a technical recession. Annual growth slowed to 2.2%, Statistics New Zealand data showed. The weakness in the economy will not be seen as a negative by the central bank, which has said it needs economic growth to slow to dampen inflation and inflation expectations. The Reserve Bank of New Zealand has undertaken its most aggressive policy tightening since 1999, when the official cash rate was introduced, lifting it by 525 basis points since October 2021 to 5.50%. Before the first-quarter GDP figures were released, the central bank had forecast the country would enter a recession in the second quarter of 2023, while Treasury's updated forecasts in May expected the country to avoid recession.

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Persons: Gabrielle, Jason Attewell, Lucy Craymer, Sonali Paul Organizations: Statistics, Cyclones, Statistics New Zealand, Reserve Bank of New, Thomson Locations: Statistics New Zealand, Reserve Bank of New Zealand