"The 0.7 percent gdp result for the March quarter was in line with expectations and was not sufficient to break even for the year," Labour finance spokesperson Michael Cullen said today.

"Over the March year, the economy contracted 0.2 percent under the twin influences of the drought and the Asian crisis.

"Both hit exports badly. In the March gdp figures, there are some small but welcome signs of a return to life in the export sector.

"But the export recovery is still patchy, and the evidence suggests that import growth is continuing to outstrip export growth with ominous implications for the current account deficit, already at a 14-year high.

"This is the clear message from the more recent data supplied in the May merchandise trade numbers, also released today.

"They show imports on a May 1998 to May 1999 comparison rose 9.9 percent while exports fell by an estimated 3.2 percent," Dr Cullen said.

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