Covid pushes New Zealand into worst recession in years

Covid pushes New Zealand into worst recession in years

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New Zealand is in its deepest recession in decades after taking stringent measures in response to the widely praised Covid-19 pandemic.

U.S. GDP declined 12.2% between April and June as blockades and border closures hit.

New Zealand suffered its first recession after the global financial crisis and is now the worst since 1987 when the measurement system began.

However, the government hopes that the epidemic response will lead to a rapid recovery.

A country close to 5 million has been declared virus-free for a while, and there are still a handful of cases, but only 25 have died.

The economy is expected to be a key issue in the next month’s elections, which were delayed after an unexpected surge in the corona 19 cases in August.

Stats NZ spokesman Paul Pascoe said the actions taken after March 19 had a major impact on some sectors of the economy.

“Industries such as retail, lodging, restaurants and transportation have been most directly affected by international travel bans and stringent national blockades, resulting in a significant decline in production,” he said.

Prime Minister Jacinda Ardern’s government has said the success of the virus containment will help with the outlook for recovery.

Treasury Secretary Grant Robertson said GDP figures were better than expected and suggested a strong recovery in the future.

“Going hard early means we can come back faster and stronger,” he said.

Some economists are also predicting a rapid recovery from New Zealand’s strong response to the virus.

Michael Gordon, Westpac’s chief economist, said, “We expect a record drop in GDP in the June quarter, followed by a record gain in the September quarter.”

However, the Treasury outlook released yesterday suggested that massive debt and continued turmoil could potentially delay a full recovery.

The opposition Nationalist Party has accused the government of lack of pragmatism that has exacerbated its impact more than necessary.

New Zealand recorded a steeper decline than neighboring Australia, where closures were less severe.

However, Victoria faced a second blockade that could strain Australia’s economic recovery.

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About the Author: Mortimer Nelson

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