Wellington, New Zealand — New Zealand’s economy shrank in the second quarter, according to official data Thursday, pushing the country close to recession.

The 0.2 percent on-quarter contraction in April-June, revealed by StatsNZ, followed anaemic growth of 0.1 percent in the previous three months.

High prices, elevated borrowing costs and a housing crisis have weighed on consumers, while the key dairy sector saw exports fall.

A recession is usually defined as two consecutive quarters of contraction.

READ: New Zealand limps out of recession

But observers believe New Zealand is experiencing a recession in all but name — with the economy contracting in three of the past five quarters.

“We’ve recorded a triple trough in economic activity. But it’s effectively a recession that’s lasted two years,” said Kiwibank chief economist Jarrod Kerr.

“The GDP report is already old and dated. And it told us what we already knew. New Zealand remains in a prolonged recession.”

Finance Minister Nicola Willis pinned the blame squarely on New Zealand’s Reserve Bank, which has kept interest rates high to tackle inflation.

The bank is likely to come under further pressure to cut borrowing costs after the US Federal Reserve on Wednesday lowered its rates by half a basis point.

Willis insisted that the green shoots of economic recovery were coming through, even though most forecasts predict another contraction in the third quarter.

“The New Zealand economy is resilient, and it will recover,” she said.

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