NZealand economy grows slower-than-forecast 0.2pct

New Zealand’s economy grew less than economists estimated in the third quarter, driving the nation’s currency to a three-month low on speculation the central bank may not need to raise interest rates until mid-2010. Gross domestic product rose 0.2 per cent from the previous quarter, Statistics New Zealand said in Wellington today. That was half the median forecast of a 0.4 percent gain in a Bloomberg survey of 12 economists. New Zealand’s dollar dropped to 69.75 U.S. cents, the lowest since September 14, from 70.20 cents before the report was released. It bought 69.89 cents at 12.10 pm in Wellington. The currency had climbed 12 per cent against the US dollar the past six months and the NZX 50 stock index gained 14 per cent on signs of a pickup in the economy. The economy shrank 1.3 per cent in the third quarter from a year earlier, today’s report showed. That compared with a 1.2 per cent contraction estimated by economists. Business investment fell 0.9 per cent, the fifth straight decline, as companies spent less on plant and machinery, today’s report showed. Manufacturing dropped 1.9 per cent and construction declined 4.4 per cent.