New Zealand slipped into recession as the economy shrank in the first quarter, data showed, reducing the risk the central bank would need to hike interest rates further but creating a new headwind for the government's re-election hopes.

• Gross domestic product (GDP) matched analysts' expectations of a 0.1% contraction in the March quarter but was well below the Reserve Bank of New Zealand's (RBNZ) forecast of 0.3% growth. Furthermore, fourth-quarter GDP was revised to a contraction of 0.7% from a decline of 0.6%.
• The New Zealand dollar slipped 0.2% to $0.6197 after the data as it was in line with market expectations and gave traction to the central bank's position that no further interest rate hikes would be needed.
• Weakness in the economy was broad-based with output from half of the country’s industries contracting, according to the Statistics New Zealand data. Growth was hurt by the impact of two major cyclones and flash floods in Auckland in January and February.