Negative GDP figures could yet be revised upwards, claims Cullen

Figures showing the economy shrank in the last three months of last year could yet be revised to show growth, Finance Minister Michael Cullen says.

Gross Domestic Product (GDP) data released last week showed the New Zealand economy shrunk 0.1 per cent in the final three months of last year.

Another quarter of negative economic growth would technically be considered a recession.

Dr Cullen reiterated today that he believed the economy would grow in the first quarter of this year and also said it was possible last quarter's figures would be revised to show a positive.

"There were some rather odd features in that number."

One was a high level of de-stocking by shops.

"It's quite possible it will be revised back upwards again and of course it's minus 0.1 so it does not need much revision to move back into positive territory."

The figures are calculated by Statistics New Zealand.

Dr Cullen said surveys showed a mild upswing in business confidence this quarter, which he believed would flow into growth.

He said if there were a technical recession, it would be very short and small.

Dr Cullen said the Government's extended Working for Families package, the first part of which kicked in on April 1, would also help growth by stimulating the economy.

Prime Minister Helen Clark said the package would also make it easier for families to make ends meet.

"The reason behind prioritising extended tax relief for families was that raising children is one of the most important jobs in our society and people need support to do it."

- NZPA