WELLINGTON, New Zealand (AP) - New Zealand will spend about NZ$7 billion (S$5.8 billion) on stimulus measures in the next two years to try to lift the country out of recession, the new government said on Wednesday.

Finance Minister Bill English said the money would be allocated to new infrastructure spending, providing financial aid to workers hit by layoffs as the economy slows and includes tax cuts planned for April.

The measures were among the campaign promises made by Prime Minister John Key before he was elected to power earlier this month, though the cost has not previously been announced.

New Zealand slipped into recession earlier this year for the first time in a decade, and the Paris-based Organisation for Economic Cooperation and Development warned in its latest report that the economy will remain in recession through 2009, with only modest recovery projected in the middle of 2010.

The central bank has responded to the financial crisis by cutting interest rates aggressively since July, taking the Official Cash Rate down to 6.5 per cent from 8.25 per cent. Most market analysts expect the bank to deliver a 100 basis point cut at its Dec 4 meeting. -- AP