New Zealand's economy may fall into a technical recession in the first half of the year after posting a second consecutive quarter of decline in retail sales.
The definition of a technical recession refers to having two consecutive quarters of negative growth in gross domestic product (GDP).
The latest data from Statistics New Zealand on Thursday reported sales adjusted for inflation fell 2.3% in the three months to June, following a 0.9% contraction recorded in the first quarter.
The figures recorded turned out to be much weaker than market expectations which expected retail sales to jump 1.7% after the fall recorded in the previous quarter.
This indirectly increases the prospect of consecutive falls in quarterly GDP, or in other words, a recession in New Zealand.
For the record, the economy shrank by 0.2% in the first quarter.
However, although key indicators of exports, manufacturing and construction were recorded weakly, analysts did not predict a downturn in the country.
In fact, last week the Reserve Bank of New Zealand (RBNZ) projected growth of 1.8% after it raised interest rates by 50 basis points at its recent policy meeting.
The New Zealand dollar appeared to ignore the fall recorded in this data, instead recording an increase taking advantage of the decline in the US dollar in the Asian session.
