New Zealand will relax rules to lure foreign investment, Prime Minister Christopher Luxon said on Thursday, as his center-right government tries to spur economic growth and boost employment.

New Zealand's economy sank into recession in the third quarter as activity dived far more sharply than expected, leaving the door open for further rate cuts by the central bank.

In his annual state of the nation address, Luxon said he would set up Invest New Zealand, part of the government's international economic development agency, as a one-stop-shop for overseas investment.

"Modelled off the success of Ireland and Singapore, Invest New Zealand will roll out the welcome mat - streamlining the investment process and providing tailored support to foreign investors," Luxon said.

It will help increase capital investment across banking, fintech, transport, energy and manufacturing, he said.

"I want a country with more start-ups, more IPOs, more investment, higher incomes, and whole ecosystems of growth and innovation. I want the best ideas and the best investments from offshore making a difference here at home," Luxon said.

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New Zealand's central bank has cut the official cash rate by 125 basis points since August as inflation eased but economic activity also contracted. The central bank said in November it expected to cut by a further 50 basis points when it meets next month.