There is a good chance the recession of the past 18 months is finally over although the sharemarket faces "hard sledding", according to fund manager AMP.
The real pickup in economic growth may be some time away, but the worst seems to be over, AMP said.
"It has been a pretty mild recession in New Zealand," said AMP Capital Investors' head of investment strategy, Jason Wong, announcing the fund manager's quarterly returns yesterday in Wellington.
"It is not as long or deep as the late 1980s or 1990s or the mid-1970s," he said. Other countries had seen their worst recessions since the 1930s.
"New Zealand has come out of the turmoil pretty well, because we did not have the banking system concerns of other countries," Mr Wong said.
Despite that, unemployment was expected to keep rising from 5 per cent to more than 6 per cent because of a usual lag. While there had been a "V"-shaped recovery internationally, "it could easily come back down again" with fairly weak demand, Mr Wong said.
"There are quite a few hurdles for global economic growth."
There were some "green shoots" in New Zealand, including a recovery in consumer and business confidence, a remarkable bounceback in house sales volumes from low levels, and a rise in net migration. Household borrowing and retail sales were also rising.
There was no real sign of an export recovery, but overseas sales had held up relatively well.
"On balance, we think the recession is pretty much over," Mr Wong said.
