'Hobbit exit' could cost $1.5b for Kiwis

WELLINGTON - New Zealand's economy could lose as much as $1.5 billion if Warner Bros relocates its production of its film The Hobbit with the country's burgeoning film industry suffering long-term damage, economists said on Friday.

New Zealand filmmaker Peter Jackson shot his blockbuster Lord of the Rings trilogy in his home country, which bolstered the local film industry. He planned to shoot a two-part adaptation of J.R.R. Tolkien's The Hobbit locally as well.

But the project's future in New Zealand is now in doubt after actors' unions boycotted working on The Hobbit and Time Warner Inc's Warner Bros started looking for alternative locations for the estimated $500 million production.