Okay, after yesterday's current acount shocker, a $14.5 billion deficit at 9.3% of GDP, Statistics New Zealand has just released the long-awaited March quarter GDP figure.

And the figure is ... 0.7% growth. And that means there is no recession in New Zealand.

The reality is there has never been much chance of a second consecutive negative quarterly GDP figure. The December negative itself was a surprise and economists have been revising their March forecasts up steadily over the last few months as good economic indicators outweighed bad.

That said, right now it's hard to say what a good GDP figure would be. If it is high, it could push the dollar up and we don't want that, especially in light of the current account. If it's low it means there's more of a slowdown than the economy needs. There isn't really a right answer.

Now I have already joined the chorus of journalists, sorry people, calling for tax cuts. But here's an interesting angle on the benefits of Cullen's somewhat extreme fiscal discipline.

"At 9.3 per cent of GDP, Standard & Poor's regards the current account deficit as high and unsustainable, placing pressure on the AAA/Stable/A-1+ local currency and AA+/Stable/A-1+ foreign currency credit ratings on New Zealand," credit analyst Kyran Curry said in statement.

He said the Government's fiscal discipline had provided a vital buffer to mitigate the effects of the country's high external debt.

Hmm, maybe the government is better at managing our money than we are ;-) Okay, that's a very tongue in cheek comment especially in the light of this:

Government administration and defence recorded its eighteenth consecutive quarter of growth (up 3.2 percent), and was up 9.3 percent for the year ended March 2006.

Anyway 0.7% may lead some economists to raise their GDP forecasts for the year. Despite that we are entering a period, maybe up to three years barring external shocks, of lower GDP growth, as this guy reports.