WELLINGTON, New Zealand (AP) — New Zealand's economy all but stalled in the first quarter as lower prices for milk and oil pushed down growth to 0.2 percent, according to figures released Thursday.
It was the worst quarterly performance in two years and below market expectations. The result pushed down the currency by more than 1 percent, with the New Zealand dollar trading Thursday at about 69 U.S. cents.
Wholesale prices for the country's key dairy exports have fallen by more than 50 percent since early last year, due in part to slowing economic growth in China.
New Zealand's weaker economy prompted the central bank this month to cut interest rates by a quarter point to 3.25 percent. Thursday's figures will increase pressure on the bank to cut rates further.
Figures released by Statistics New Zealand showed agriculture declined by 2.3 percent during the quarter, due to lower milk and forestry exports. Mining was down 7.8 percent due to decreased oil and gas exploration and extraction.
Retail trade and accommodation, meanwhile, was up by 2.4 percent and international tourist spending up by 2.3 percent during the quarter. One contributing factor was that New Zealand co-hosted the Cricket World Cup.
The economy grew at an annual rate of 2.6 percent when comparing the most recent quarter with the same quarter last year.
Finance Minister Bill English said in a statement that the results showed there were risks in having an economy closely tied to international markets but the country was continuing to move in the right direction. He said 74,000 new jobs had been created in the last year and average wages had been increasing.
Opposition lawmaker Grant Robertson said the government had made a losing bet that dairy prices would remain strong and had underinvested in other parts of the economy.