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
world

New Zealand economy shrinks record 12%

43 Comments
By GREG BOWKER

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

©2020 GPlusMedia Inc.

43 Comments
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Worst in history, simply destroyed by the muppet.

Australia atleast kept some industries running and will suffer much less damage.

-1 ( +11 / -12 )

"Economists expect the current September quarter to show a record jump back to growth in the economy."

Easy to get a record jump back after a record fall.

But they didn’t eradicate the coronavirus after all that, so hmm...

-4 ( +8 / -12 )

Will St. Jacinda still continue to be venerated by the people of New Zealand in the future?

-3 ( +11 / -14 )

Well done. Much better than other countries.

-6 ( +9 / -15 )

But they didn’t eradicate the coronavirus after all that, so hmm...

they did a far better job at saving lives and getting life back to normal than most

0 ( +14 / -14 )

The export impact for an economy’s small as NZ will be limited and recover reasonably quick.

however domestic there will be drama

6 ( +9 / -3 )

Well life in NZ is far better than Japan (3rd largest economy in the world) before and after the virus. Might be a Suprise to some NZ broke subsidies for farmers and other failed Buisness models, it hurt don't get me wrong but it worked I think Japan could Learn a few lessons.

The government actually cares, it has too because of the voting system. If you remember the 80s compared to now, it's chalk and cheese. If you don't reaseach. Every country has suffered the impact but with a bit of common sence and some fencing wire NZ will survive.

-1 ( +10 / -11 )

Inevitable outcome of closing their borders to tourists, but that will bounce back later. It is bad for some for sure. One quarter won't tell the whole story. Exports are still good. Property and share prices are holding up. I wonder if the informal economy did a bit better. A lot of people I know are busy doing DIY stuff.

8 ( +9 / -1 )

Well life in NZ is far better than Japan

I am not sure how you figure that. All told you might be correct but the price of a sandwich in New Zealand is definitely enough to wipe the smile from my face.

What always got me is the fact that New Zealand is one of the most remote and isolated countries on the planet, yet so many are so hot to laud an internal complete over-reaction to Covid 19 as the sole reason for success against Covid 19. Of course politicians love it when people blame them for success they had little to do with. They will just capitalize off it. Well, lets see how much hardship Kiwis can handle before they turn on those politicians who will then attempt to deny they actually supported anything that happened.

2 ( +12 / -10 )

That should silence anybody who believes or advocates 'Lockdown', Anywhere. The pain (is sadly) just beginning. For those who think one quarter doesn't matter is very, very wrong.

-1 ( +7 / -8 )

@cricky

Depends on what your after.

Nz has the slow, outdoors life, which is paradise for some and boring for others.

Japan, is busy and varied.

I enjoy a holiday to nz, but would get restless living there.

@Vanessa

Nz is way too expensive, generally a third more.

@wtf

There aren't back to normal, they still have level 2.5 restrictions.

5 ( +7 / -2 )

Oh I hit a nerve, basic wages double if not more than Japan, so yes Japan is easier than NZ cheep Alcholholic drinks, smokes, but people earn more pay more isn't that the whole porpoise of inflation? If and if I managed to earn double what I do in Japan I'd move back in a second, sadly if I cash up 20 years of living in Japan even selling selling eveything I own houses cars I would be on a benifit. So who's the top gun.

1 ( +6 / -5 )

These losses are only the ones SO FAR. Until the economy and borders are fully re-opened, the contractions will continue.

My former co-worker saved for years to go back to NZ to open up his own business. He was doing well until the spring. His business was shut down by the heavy-handed gubmint "temporarily" by after a few months could no longer wait for a re-opening, so has lost everything. There are many other similar stories. Disastrous measures. Swatting a fly with a sledgehammer.

-2 ( +9 / -11 )

Wow it's so bad they didn't put out the annualized rate.

7 ( +7 / -0 )

Worst in history, simply destroyed by the muppet.

Youll find that Zealanders disagree, theyll reelected her next month, might want to prepare yourself.

5 ( +13 / -8 )

isn't that the whole porpoise of inflation

When life gives you lemons, there’s always Kaikoura.

https://www.youtube.com/watch?time_continue=1&v=eTFZdDxbACk&feature=emb_logo

1 ( +2 / -1 )

Whats the prime ministers plan for people who lost their businesses and contemplating suicide?

2 ( +8 / -6 )

I notice that several of us are getting thumbed down for stating the bloody obvious but the detractors are staying silent. '' Lockdown ''didn't work/doesn't work/will not work. It creates financial ruin.

5 ( +10 / -5 )

That’s what happens when you follow North Korea, Opps, Australia’s draconian measures.

at least NZ gives money to the needy though.

-1 ( +5 / -6 )

The PMs plan for those contemplating suicide, mental health measures,.

1 ( +3 / -2 )

I'm eating plenty of NZ kiwi fruits!

2 ( +5 / -3 )

CrickyToday  11:53 am JST

Well life in NZ is far better than Japan

That's also what the 3 million Kiwi bartenders in bars throughout the east coast of Australia told me. It's so good that none of them want to live there.

4 ( +9 / -5 )

Thanks Jacinda for ruining the NZ economy.

1 ( +8 / -7 )

That's also what the 3 million Kiwi bartenders in bars throughout the east coast of Australia told me. It's so good that none of them want to live there.

NZ is tied with Australia for best country in the world. Just NZ is more expensive.

2 ( +5 / -3 )

If your opinion is based on what a bar tender tells you, It must be true,? Might think about drinking less and having an opinion based on what a bar tender tells you.

-5 ( +2 / -7 )

theResident - ' Lockdown ''didn't work/doesn't work/will not work. It creates financial ruin.

I think the evidence contradicts you there. If the plan is to limit spread of the disease, lockdown clearly works and saves lives.

Theres no denying lockdown has severe financial consequences. So having got the disease under some level of control the authorities have to find a balance between allowing people to live their lives and the deaths of those that will succumb to the disease. Some countries have done a better job of finding that balance than others but there’s no avoiding a financial sacrifice in order to save lives.

-2 ( +1 / -3 )

@SwissToni: Sweden was initially called irresponsible and reckless by many back in the Spring and their chief epidemiologist was widely condemned They wanted to 'control' rather than eliminate the virus. They barely 'locked down' instead restricting very large gatherings. Schools, Business and Restaurants remained open. Yes, there were some mistakes made but overall it now looks like a success as they are bottom of the league (by capita) in the current 'second wave' that is growing in Europe AND their economy is in pretty good shape. Spain on the other hand which imposed the strictest measures initially , now has the highest number (by capita) in this second wave.

I understand your 'finding that balance''argument but I don't think there is one when it comes to imposing a so called 'lockdown'' It didn't really work. More should have been done to protect the hospitals and aged homes in many countries.

Boris Johnson in the UK has basically ruled out a second full lockdown in the UK as he admitted it would be nothing other than a financial catastrophe. We have much to learn over the coming months. My apologies to anyone has lost a relative to COVID - I do not wish to appear unsympathetic.

3 ( +6 / -3 )

CrickyToday  03:43 pm JST

If your opinion is based on what a bar tender tells you, It must be true,? Might think about drinking less and having an opinion based on what a bar tender tells you.

You keep focusing on that they were bartenders, but they all had one thing in common: They were New Zealanders LIVING in Australia telling people like me how great NZ is. I also experienced this in London. That's enough truth for me.

The funniest thing one of them said was "The population of NZ is actually 12 million if you include all the expats"..... soooo THAT'S how good NZ is, the majority of them aren't even there. Or was he referring to livestock?

1 ( +2 / -1 )

No nation will be able to contain this pandemic until there is a full and thorough drains up investigation into the origins of COVID-19.

To achieve this, the Government of China must be held to account, fully.

When will the Global community, step up to the plate, and insist that the Government of China fully complies to a full independent investigation?

The Government of New Zealand has set a global standard, as have South Korea for dealing with this pandemic.

However, this has amounted to running around in circles.

Grab the bull by the horns, cancel the Government of China debt holdings globally.

-2 ( +1 / -3 )

A Global Standard? The approach of South Korea and New Zealand was very, very different. That by definition is not 'standard'

2 ( +2 / -0 )

oh - @itsonlyrockandroll: What will you do if China try to offload all their UST's?

0 ( +1 / -1 )

theResident, I don’t think we’re too far apart. Sweden did suffer a substantial economic hit (over 8% drop in GDP) albeit much less than some others. Sweden’s demographics also are poles apart from the far more densely populated Spain, Italy, UK etc. But it does seem they found their balance at an acceptable cost.

I do think that the lockdowns were demonstrated the quickest way to reduce the spread of infection, especially in densely populated areas. Now of course, following those lockdowns major cities are proving a real headache to keep a grip on. It’ll be a while before everyone can go about their lives unfettered by COVID-19. At least if we wish to keep our vulnerable and older people around for a bit longer.

0 ( +2 / -2 )

theResident, help me out on this, I am stating an believed global standard.

0 ( +0 / -0 )

Can you elaborate, I am assuming you are a New Zealander

0 ( +0 / -0 )

Ok it sucks are you happy now? Bartenders made the right choice? And we all know bartenders are on a winning curve so why not listen to them. I have in a drunken state also been amazed at their insitful perspective. So you are right. I feel very bad now.

-1 ( +2 / -3 )

How many suicides do you think there have been (especially over and above the usual number) ?

1 ( +2 / -1 )

Bjorn TomentionToday 11:21 am JST

Worst in history, simply destroyed by the muppet.

Australia atleast kept some industries running and will suffer much less damage.

the UK economy recorded a 20.4% contraction in the same period. Japan's economy contracted 27.3 % in the same period. United States economy contracted by almost 33 %. However, NZ is doing terribly. You, Akula and the rest of the red pill brigade are geniuses. Why haven't you all been snapped up as economics advisors to some of these countries.

-1 ( +2 / -3 )

NZ gdp contraction was quarterly, USA's and Japan's are annualized.

I don't know about the UK, probably quarterly also so worse than NZ

1 ( +1 / -0 )

Australia contracted 7% for the same quarter

0 ( +0 / -0 )

Yes, it's interesting that the media obfuscates the differences in economic contractions by reporting some as annualized (mostly countries that did not have national level lockdowns) and others as quarterly(mostly those that had national level, totalitarian lockdowns) illustrating the truth of Mark Twain's remarks about Lies, Damned Lies, and Statistics. It's rather sad that many seem to be content to sacrifice their liberty for the illusion of momentary security.

0 ( +1 / -1 )

@ i@n: you are wrong, they were for the second quarter of 2020. if the rates of contraction were for the year, it would be an economic catastrophe...

-1 ( +0 / -1 )

The National supporters commenting here (e.g., Bjorn, Akula) seriously think National are better managers of the economy than Labour? Until the COVID situation, debt as a percantage of GDP had declined compared with when National had left office. So far, National have promised tax cuts for the highest income earners and corporate payers. The second prong of their approach is likely to be more austerity measures for lower income earners (although this is unlikely to be announced unless they are miraculously elected to form a government after the election). Both policies are straight off the neoliberal blueprint and both policies are both known to be failures. It is now well known that the trickle down does not work (unless you enjoy golden shower from a rich person) and there remains little sober analysis that shows austerity does what it promises. Overall, National's policies are yeaterday's ideas for the benefit of those of us already super rich or in positions of power, if you are not in either of these groups (and I suspect you are not), you missed the boat...

1 ( +1 / -0 )

Well, to be fair, the economic impact on NZ of their particular approach has been greater than on other nations for Q2. 12.2% vs around 8% for Japan, Sweden and around 9% for the US.

Of course, comparing public health results, NZ has had greater success, albeit not total as originally touted.

But most importantly, for all those above on either side of the issue, this is only half time, if that. Lets see Q3 and Q4 data for both economics and public health before we declare winners and losers (as so many, rather morbidly, seem to want to do).

0 ( +0 / -0 )

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