Recession Not Quite As Bad As We Thought?

The just released September quarter GDP figures confirm that we were in recession but it was marginally less bad than most were expecting.  Dr Bollard, when I was last talking to him suggested that the December quarter may be better than September and that next year we might be out of recession.  We shall see.  Alan did confess that all the risk was on the downside.  Export performance and a flatter than expected Christmas retail performance (judgeing from sales data to date) suggest to me that any growth in the December quarter will be a very good outcome.  I am still picking a shallow recession until the start of 2009.  In the circumstances I favour a further, but more modest, cut in the OCR in January.

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