The recession is likely to continue until at least September but New Zealand is tipped to come out of the global downturn first and in much better shape than many of the other affected OECD countries.
For a financial crisis that started in midwest America, the consequences have been devastating for many.
Investors saw their life savings wiped away in a frenzy of greed and dubious investing as mortgages given to people who could not afford them were sliced up and reissued in unfathomable things called collateralised debt obligations.
Once Americans started losing their jobs, they stopped paying their mortgages, banks could not pay investors and the world economies started collapsing.
Trillions of dollars were being pumped into the United States, European and Japanese economies in an attempt to stop the slide.
In New Zealand, banks stopped lending money to home owners as property values started to slide. People who had borrowed to the maximum against their homes were faced with negative equity.
Banks wanted their money back.
Large-scale property developments, including some in Queenstown, hit the wall as investors ran out of money. The good times were over.
Credit card debt had soared as people juggled their cash flow with their debt obligations.
But suddenly, Prime Minister John Key and Reserve Bank governor Alan Bollard are pointing to a recovery of sorts happening in New Zealand.
Unfortunately, more pain is on the horizon.
Unemployment always lags behind the rest of the economy. Treasury, not known for its accurate forecasts of late, is predicting unemployment to rise to 8%. That could mean 10%.
United States President Barack Obama is predicting unemployment there to rise to double digits. In some areas, it has already reached 14%.
There are signs that New Zealanders have learnt to deal with the downturn in the economy, although 1200 people a week are still joining the dole queues.
A survey out this week showed nearly half of working New Zealanders could only last up to one month on their savings if they lost their job and 28% anticipated a need to use credit to pay for things they otherwise could not afford during the three months ended September.
That indicates that local economic conditions will continue to affect household budgets.
Westpac chief economist Brendan O'Donovan says the New Zealand economy is turning the corner after 18 months of misery.
"Times are still very tough but we are now seeing the first signs of recovery. If it were not for the threat of swine flu, we would say that the recession has already ended."
The economy was expected to contract 2.1% this year before expanding 2.6% in 2010. A surge in net migration, due to fewer New Zealanders leaving and more coming home, was set to drag New Zealand out of recession in what Mr O'Donovan called a "people-led recovery".
The residential construction industry would be the first to benefit from the influx of people, with rapid growth next year.
Other potential beneficiaries included home owners, who would be happy to see the end of declining house prices, and retailers.
"When all is said and done, more bums on seats means more economic activity," he said.
Westpac expected rising unemployment and weak exports would keep the recovery modest at first. The economy might grow, but the business situation would still feel miserable for a while longer.
Global economic conditions had generally been better than expected, especially in China. However, the global economy was still mired deep in recession and Mr O'Donovan expected only a tepid global recovery.
Interestingly, more than half of executive-level job seekers in New York think the recession has been good for their children, as a lesson that opportunity will not be handed to them.
Most of those surveyed said the economic crisis had a positive effect on personal relationships, with a third saying family and friends had grown closer and a third saying they had done more networking and made new friends.
On the downside, 23% said the recession made them depressed that their children would not have the same opportunities they did and 27% said the recession had caused them to drift away from old friendships.
Asked to list the best things to emerge from recession, 32% said it was a reality check and they now were pursuing work they enjoyed; 25% said it was an opportunity to show leadership skills; and 13% said the company had learned to be more efficient.
Ten percent said cutting back on working hours had allowed them more time with family and another 10% said they had started their own business.
Emotions about the last year ranged from frustration, fear, confusion, and anger through to hope, happiness and relief.
