New Zealand is in its deepest recession in decades after stringent measures in response to the Kovid-19 epidemic, which were widely praised.
The country’s GDP plummeted by 12.2% between April and June as lockdown and border closure hit.
It is New Zealand’s first recession since the global financial crisis and its worst since 1987, when the current system of measurement began.
But the government hopes that its epidemic response will lead to early recovery.
The nation of about five million was briefly declared virus-free, and although it still has a few cases, it has suffered only 25 deaths.
The economy is likely to be a major issue in next month’s election, which was delayed after an unexpected spike in the Kovid-19 cases in August.
Stats NZ spokesman Paul Pascoe said the measures implemented since March 19 have had a huge impact on some sectors of the economy.
“Industries such as retail, housing and restaurants and transportation saw significant declines in production as they were directly affected by international travel restrictions and strict nationwide shutdowns,” he said.
- How did New Zealand Kovid-19 become free?
- New Zealand: Janinda Erdern Delays Election on Coronovirus Fear
The government of Prime Minister Jacinda Ardern has said that success in suppressing the virus can help in recovery prospects.
Finance Minister Grant Robertson said GDP numbers were better than expected, and suggested a strong recovery ahead.
“Working hard and going fast means we can return faster and stronger,” he said.
Some economists are also predicting a rapid recovery due to New Zealand’s strong response to the virus.
“We expect a record-breaking GDP decline in the September quarter,” said Westpac senior economist Michael Gordon.
But Treasury forecasts released yesterday suggested large-scale debt and full recovery from continuing disruptions is likely to be delayed.
The opposition national party accused the government of lack of pragmatism which made the impact worse.
New Zealand recorded a drop compared to neighboring Australia, where the lockdown was less severe.
But the state of Victoria has faced a second lockdown, which is likely to weigh on Australia’s economic recovery.