Bloomberg reported that New Zealand, which has cut interest rates by more than almost any other nation in the past 6 months, may face another year of recession as the deepening global slowdown reduces exports of meat, wool and timber.

As per report, Mr Alan Bollard governor of Reserve Bank will lower the official cash rate by 1 percentage point to 4%. That would bring total reductions since June 30th 2008 to 425 basis points. Among 54 central banks monitored by Bloomberg, only Moldova will have cut rates by more.

Mr Nick Calavrias MD of Steel & Tube Holdings Limited said that "We can kick start the domestic economy but the world is in a recession no matter what we do. We can not create demand if it’s not there."

According to ANZ National Bank Limited, prices of New Zealand’s export commodities plunged by 24% in 2008 and may drop further. Overseas shipments are equivalent to about 30% of New Zealand’s USD 130 billion economy.

According to a survey by New Zealand Institute of Economic Research Inc, the outlook for corporate profits slumped to the weakest in 26 years last quarter. The number of companies that expect to reduce their workforce rose to the highest since 1991, the polled showed.

(Sourced from www.bloomberg.net)