Another country joins the list of economies tilting into recessionary headwinds. Data for the second quarter of 2008 is expected to show that the New Zealand economy has entered a recession for the first time since the fall-out from the 1997-98 emerging markets financial crisis. Consumer and business confidence has declined and rising inflation has hit household real incomes. The New Zealand Treasury reports that

“The fall in profitability, both experienced and expected, is due to weakening demand from households and increasing cost pressures. More firms are now reporting demand as the main constraint on production as opposed to supply factors such as labour, finance and capital.”

More here from the BBC and also from the New Zealand Treasury report.