New Zealand is in its deepest recession in decades, following stringent measures in response to the Covid-19 pandemic, which were widely praised.
Between April and June, the country’s GDP fell by 12.2% as they affected the closure and closure of borders.
It is New Zealand’s first recession since the global financial crisis and the worst since 1987, when the current measurement system began.
But the government hopes its response to the pandemic will lead to a speedy recovery.
The nation of about five million was briefly declared virus-free and, although it still has a handful of cases, has only had 25 deaths.
The economy is likely to be a key issue in next month’s election, which was delayed after an unexpected rise in Covid-19 cases in August.
Stats NZ spokesman Paul Pascoe said the measures implemented since March 19 have had a major impact on some sectors of the economy.
“Industries such as retail, accommodation and catering and transportation saw significant falls in production because they were directly affected by the international travel ban and strict national closure,” he said.
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The government of Prime Minister Jacinda Ardern has said that success in suppressing the virus is likely to help the prospects of recovery.
Finance Minister Grant Robertson said GDP figures were better than expected, and suggested a strong recovery ahead.
“Going strong and fast means we can come back faster and stronger,” he said.
Some economists also predict a rapid recovery, due to New Zealand’s strong response to the virus.
“We expect the record fall in GDP in the June quarter to be followed by a record rise in the September quarter,” said Michael Gordon, a senior economist at Westpac.
But Treasury forecasts released yesterday suggested massive debt and continued disruptions are likely to delay full recovery.
The national opposition party accused the government of a lack of pragmatism that worsened the impact of what was needed.
New Zealand recorded a stronger fall than neighboring Australia, where the blockade was less severe.
But the state of Victoria has faced a second blockade, which is likely to affect Australia’s economic recovery.