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New Zealand's economy being in worse shape than expected - and suffering through a deeper and longer downturn than the global financial crisis - may mean more interest rate cuts.
Stats NZ said on Thursday that gross domestic product (GDP) dropped 0.9 percent in the June quarter, a steeper contraction than had been expected.
Economists said that had increased the chance that the Reserve Bank would need to cut the official cash rate (OCR) more than earlier expected, which could bring down home loan rates, too.
Westpac chief economist Kelly Eckhold said it seemed more likely than not that the rate might have to drop to 2.25 percent, rather than stopping at 2.5
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