New Zealand's economy sank into recession in the third quarter as activity dived far more sharply than expected, while the prior quarter was also revised sharply downward, a dire result that cements the case for more aggressive rate cuts.

New Zealand’s economy contracted much more than expected in the third quarter and the second quarter was revised lower, putting it into recession. The local dollar fell.

New Zealand’s economy contracted sharply in the third quarter, extending a bleak period of sustained recession for the South-Pacific nation, but most economists agree that the wheels of change are in motion and the outlook for 2025 will be substantially brighter.

New Zealand's economy is 2.1 per cent smaller than it was six months ago, according to new GDP data from Stats NZ.