"In New Zealand, the impact of difficult trading conditions is showing through clearly in reduced export revenues, weak business sentiment, and sharply curtailed investment and employment," Alan Bollard, governor of the Reserve Bank of New Zealand, said.

"As economic activity troughs, we expect rapid easing of monetary policy to slow."

Bollard said that he did not think that interest rates would fall to near zero-rates of other nations fighting recession.

However, he cautioned that the extent of the world recession and subsequent uncertainty meant that any economic recovery might be later than expected.

New Zealand is suffering its worst recession since the 1970s, when an oil-price shock hit nations across the globe.