New Zealand's economy is expected to shrink by 0.1% in the second quarter, lower than the Reserve Bank of New Zealand's expectations

New Zealand's economy remains weak, but second-quarter GDP data released this week will show that the country's economy is not as bad as the Reserve Bank of New Zealand thought when it recently cut interest rates.

JPMorgan economist Ben Jarman said New Zealand's economy will see a quarterly contraction of about 0.1%, rather than the 0.5% contraction the Reserve Bank of New Zealand had said was imminent.

He added that JPMorgan's forecasts meant the economic growth outcome was not that bad and if the data met forecasts it would reduce the chances of a 50 basis point rate cut at the RBNZ's next meeting.