New Zealand falls into recession

The New Zealand statistics agency says the economy has gone into recession for the first time since 1998.

Gross domestic product shrank 0.3% in the first quarter, and 0.2% in the second quarter this year. But annual growth until June remained positive.

Economists define recession as two straight quarters of economic decline.

New Zealand is suffering from the global credit crunch, rising food and fuel prices, and drought which cut production in agricultural industries.

Economists said the second quarter decline was less than expected, but GDP will probably shrink again in the third quarter.

Despite the dip into recession, average economic growth for the year to June still amounted to 2.6%, the government agency said.

Finance Minister Michael Cullen said a return to positive growth was likely by the end of the year.