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Drought temporarily slows New Zealand's economy

WELLINGTON, New Zealand (AP) -- The effects of a drought slowed New Zealand's economy in the second quarter but economists predict growth will pick up again in the coming months.

Government agency Statistics New Zealand said Thursday the economy grew by 0.2 percent in the June quarter and 2.7 percent for the year.

New Zealand relies on dairy and meat exports to power its economy. The agency said agricultural activity was down 6.4 percent in the quarter and 10.4 percent from its peak in December as the effects of a Southern Hemisphere summer drought rippled through the economy.

A mild, wet winter since has given farmers plenty to cheer about.

Business services, construction, retail trade and accommodation all posted gains of more than 2 percent in the quarter.