The New Zealand economy continued to claw its way towards brighter times, having grown for the second consecutive quarter in September.
BNZ markets economist Stephen Toplis said yesterday few countries in the developed world could lay claim to such, with the obvious exception of Australia and, perhaps surprisingly, Japan.
"Moreover, the stage appears set for growth to slowly but surely accelerate from here through 2010."
Statistics New Zealand figures released yesterday showed New Zealand's economy - as measured in gross domestic product - grew 0.2% in the three months ended September, narrowing the annual change to -1.3%.
The BNZ's early estimate for the fourth quarter was for the economy to grow 0.4%, with the expectation it would expand 2.5% on an annual average basis through 2010, he said.
"This is yet further evidence that New Zealand has come through the global turmoil with relatively little damage."
Yesterday's data again highlighted the fact that the king-hit to the global economy had been to industrial production as consumers stopped spending in light of the property market correction and ensuing global financial concerns, Mr Toplis said.
"While many folk have been hellbent on turning New Zealand into a manufacturing economy over the years, our lack of success on this front has, in fact, saved us from the worst during this cycle."
Manufacturing, which accounted for about 13% of GDP, had contracted 11.9% over the past 12 months, despite agriculture production being such a big part of that sector, he said.
Construction activity fell 10.3%, driven by a 24% drop in expenditure on residential construction.
Wholesale trade, reflecting those declines, also slumped 10.4%.
They were by far the worst-performing sectors in the economy.
In contrast, the output of the primary sector rose 5.4% for the year and services industries expanded 1.6%.
"We note, with some irony, that one of the strongest-performing sectors over the year was finance, insurance and business services, which expanded 7.1%.
"This again highlights just how different the New Zealand environment has been."
One of the features of the national accounts was that net exports had improved, a factor that had been a key determinant in New Zealand's current account in the last 12 months, Mr Toplis said.
That was great news in that it reflected the rebalancing that New Zealand so desperately needed.
What it also reflected was imports had collapsed under the weight of deteriorating domestic demand, particularly the demand for investment goods.
The message in that story was that while New Zealand rightly focused on the need for the economy to grow through a strengthening export profile, some focus should be on how producers might become better placed to respond to domestic demand when it picked up.
Historically, any increase in domestic demand immediately flowed through into import growth, exacerbating the current account and the imbalances that needed to be repaired, he said.
Finance Minister Bill English said New Zealanders could go into the Christmas break feeling more confident about the economy and the year ahead.
Two quarters of growth - following five quarters of contraction - reflected a stabilisation in the global economy.
"The positive data follows Treasury's updated forecasts, which show unemployment is likely to peak sooner and at a lower level than previously thought, with 64,000 fewer jobs expected to drop out of the economy."
However, the economy remained fragile and any further problems abroad could weaken the country's growth prospects, he said.
That was why it was critical to improve the competitiveness of New Zealand exporters and address structural imbalances in the economy.
