Reserve Bank says more rate cuts likely
Updated 2:50PM Tuesday August 05, 2008

Treasury has added to voices saying the economy is in recession, but tax cuts and further rate cuts may provide a boost later this year.

Official GDP figures for the June quarter are not out until next month, but in its monthly overview of July economic indicators, the Treasury said it believed the economy has contracted for the second successive quarter.

Two quarters of GDP contraction are considered a technical recession.

Treasury's view adds to a growing body of opinion that the economy is in recession, and it says things might not improve until towards the end of the year.

Finance Minister Michael Cullen believed it would be short-lived.

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