New Zealand economy shrinks record 12%

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New Zealand’s statistics agency said the closure of national borders since March 19 had also had a huge impact of some sectors of the economy Photo: AFP/File

By GREG BOWKER –  Japan Today

New Zealand’s economy posted a record fall in the June quarter, according to official data Wednesday that also confirmed a COVID-19-induced recession as Prime Minister Jacinda Ardern heads into next month’s general election.

“The 12.2-percent fall in quarterly GDP is by far the largest on record in New Zealand,” the national statistics agency said.

The reporting period covers April to June, coinciding with a strict lockdown that began in late March and began easing in late May.

Stats NZ spokesman Paul Pascoe said the closure of New Zealand’s borders since March 19 had also had a huge impact of some sectors of the economy.

“Industries like retail, accommodation and restaurants, and transport saw significant declines in production because they were most directly affected by the international travel ban and strict nationwide lockdown,” he said. “Other industries, like food and beverage manufacturing, were essential services and fell much less.”

The second-quarter decline follows a 1.6-percent contraction in the first three months of 2020, confirming widespread expectations that New Zealand is in recession.

However, the 12.2-percent figure was below the 16 percent predicted by the government this week and fell well short of the 23.5 percent forecast in the budget last May.

Finance Minister Grant Robertson said the better-than-expected outcome was due to policies implemented by Ardern’s government, which will go to the polls seeking a second term on October 17.

“Going hard and early means that we can come back faster and stronger,” he said.”Economists expect the current September quarter to show a record jump back to growth in the economy.”

© 2020 AFP

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