New Zealand Economic Forecast

(By Tracy Withers)

New Zealand’s economy will likely rebound from the verge of a recession and expand next year, buoyed by earthquake reconstruction and a tourism boost from the Rugby World Cup.

Gross domestic product fell 0.2 percent in the third quarter, as the Sept. 4 temblor damaged houses, businesses and roads, Statistics New Zealand said in Wellington yesterday. Finance Minister Bill English said the recovery won’t be derailed, citing falling unemployment and rising prices for commodity exports.

Rebuilding work after the magnitude 7 earthquake rocked Christchurch city is underpinning demand and helping prevent a recession, economists said. Another catalyst may be the rugby tournament’s 85,000 visitors next year to the country of 4.4 million and an estimated NZ$500 million ($372 million) in tourism spending in the second half of 2011. More forecast........