Calendar 2010 was the economic rebound year that evaporated. Finance Minister Bill English came close to having to explain why New Zealand had slipped back into recession in an economy that barely budged.
The contraction in the third quarter may be a one-off event with a resumption of growth tipped for the three months ended Dec. 31.
Growth is anaemic and market interest rates tied to the official cash rate shouldn't be rising any time soon.
Economic figures so far this year, though, paint a more mixed picture. Commodity prices have reached record levels in overseas and NZ dollar terms. Inflation has accelerated, even as retailers absorb some of the cost of the GST hike, while unleaded 91 petrol is back up at around $2 a litre.
The manufacturing and services sectors have been expanding. Consumer confidence rose in January.
Yet a prevailing word to describe general sentiment in New Zealand is caution. Households are cautious. Businesses aren't investing. Appliance stores seem to be running permanent specials on consumables like LCD and plasma televisions.
Reserve Bank Governor Alan Bollard may start raising interest rates mid-year, many economists predict, but may end up with the conundrum of wanting to hike the OCR as late as the third quarter, when political parties are well into campaign mode for an election with economic stewardship up for debate.
The Reserve Bank of Australia managed to hold off on raising its target rate between May and November last year, giving a wide berth to the federal elections in August.
Traders are expecting at least two 25 basis point hikes to the OCR in New Zealand in the next 12 months, based on the Overnight Index Swap curve.
That would nudge the cash rate to 4% by year-end, still relatively low and regarded as stimulatory.
The global spike in prices of so-called soft commodities is a reminder that some of the pillars of growth are intact. China's economy has confounded economists by accelerating to the extent that the fear now is that Beijing will put its foot on the brake.
Australia's central bank is expected to keep its cash target at 4.75% on Feb. 1. Queensland's floods will knock a percentage point off economic growth for New Zealand's biggest export market. Quarterly and annual inflation came in weaker than expected across the Tasman in the final three months of 2010.
All this leaves New Zealand heading into a year that many market commentators thought 2010 would be. Growth is likely to accelerate albeit at a tepid pace.
It won't be a fizzer like 2010 though. The Rugby World Cup will bring foreign exchange with the sports-mad tourists. Election year largesse may underpin the recovery. And the kiwi dollar isn't so high that it wipes out all trace of record-high export prices.