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NZ slump may stay till March

NEW Zealand will remain in recession until at least March as business confidence languishes at a historic low and layoffs mount, the government said yesterday.

The Treasury's latest monthly analysis of the economy said that weakness in overseas and domestic demand had contributed to the country's first prolonged economic contraction in nearly a decade.

The worst case scenario in the Treasury's previous report appeared to be coming true, it said.

"All indicators suggest the New Zealand economy will remain in recession until at least March 2009," the Treasury said, adding that recent international developments all suggest that further bad news is likely on the horizon.

New Zealand fell into recession last year.

"General weakness was evident across all major indicators, with business confidence, activity expectations and capacity utilization falling to historic lows," it said.

"Businesses also reported laying off more staff in December, while a net one in three companies expect staff numbers to decline in the March quarter, consistent with rising unemployment in 2009," the Treasury added.


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