New Zealand’s GDP looks to have expanded in Q1, albeit at a slower q/q pace than at the end of 2009. The recovery should not come under serious threat in coming quarters but is likely to be sluggish compared to previous rebounds. Deleveraging in the household sector has only just begun, the housing market will probably cool, and the re-balancing toward exports and business investment is likely to be slow. In contrast, the mining sector boom should bring a far stronger economic expansion in Australia.