Business

GDP figures expected to show stalled economy

07:34 am on 21 March 2011

Economists are expecting that figures will show the economy stalled in the last three months of last year, but there's more uncertainty than usual as the 22 February earthquake severely disrupted the collection of data.

Gross Domestic Product (GDP) statistics for the December quarter are due out on Thursday. The figures are a broad measure of the health of the economy.

Household spending is expected to be offset by a pick up in exports, which had been affected by the autumn drought, and in manufacturing.

The figures are likely to be overtaken by events, however, including the earthquakes in Christchurch and Japan, and the Reserve Bank cutting the official cash rate to 2.5%.

A wide range of forecasts are being made by economists, from a 0.4% shinking of the economy to growth of 0.4%.

Westpac's senior economist Dominick Stephens expects there to have been 0.4% growth, calling it a technical recovery, in that it wasn't showing a healthy economy but a less disrupted one.

Mr Stephens says if the figures end up showing a technical recession, he doesn't expect a huge market reaction as markets are focussed on Japan and other significant events.