The looming recession could cut deeper than previously thought.

ASB is now forecasting the economy will shrink by about two-percent by early next year, double the contraction it was forecasting three months ago.

Former Reserve Bank economist Michael Reddell says its a plausible prediction.

He told Tim Dower every time the Reserve Bank tries to significantly reduce inflation, it's a recipe for recession.

Reddell says every time inflation has been brought down so quickly in the past, it's led to a recession, usually a severe one.

LISTEN ABOVE

The looming recession could cut deeper than previously thought.
ASB is now forecasting the economy will shrink by about two-percent by early next year, double the contraction it was forecasting three months ago.
Former Reserve Bank economist Michael Reddell says its a plausible prediction.
He told Tim Dower every time the Reserve Bank tries to significantly reduce inflation, it's a recipe for recession.
Reddell says every time inflation has been brought down so quickly in the past, it's led to a recession, usually a severe one.
LISTEN ABOVE

Best of Business is the home of all things business at Newstalk ZB, from morning market updates right through to incisive interviews with New Zealand’s top business leaders and decision makers. 

Whether you’re a small business owner or interested in what’s going on in the Big End of Town, this podcast encompasses the sharpest voices and minds in the world of business.

Best of Business is the home of all things business at Newstalk ZB, from morning market updates right through to incisive interviews with New Zealand’s top business leaders and decision makers. Whether you’re a small business owner or interested in what’s going on in the Big End of Town, this podcast encompasses the sharpest voices and minds in the world of business.

Best of Business is the home of all things business at Newstalk ZB, from morning market updates right through to incisive interviews with New Zealand’s top business leaders and decision makers.