Business & Economy

New Zealand enters recession after ‘largest quarterly GDP drop on record’

Sydney, Australia, Sep 17 (efe-epa).- New Zealand has entered a technical recession with its economy shrinking a record 12.2 percent in the second quarter of 2020 as a result of the hard restrictions imposed in the country to fight the COVID-19 pandemic, official data showed Wednesday.

The economy, which registered a 1.6 percent drop between January and March, has accumulated two consecutive quarters of negative growth, therefore entering a technical recession after 11 years of growth.

“The 12.2 percent fall in quarterly GDP is by far the largest on record in New Zealand,” national accounts senior manager Paul Pascoe said in a statement released by the Stats NZ (Statistics New Zealand).

Annually, GDP fell by 2.0 percent – the first annual decline since the March 2010 quarter.

The majority of construction and some manufacturing sub-industries were temporarily shut down under alert level 4, a total lockdown at the peak of the restrictions.

According to figures released by the agency, construction decreased by 25.8 percent during the second quarter and manufacturing fell by 13 percent, while household spending decreased by 12.1 percent.

Retail, hospitality and transport were other sectors most affected by the imposed lockdown, one of the strictest in the world, activated in March along with the sealing of borders when the country had registered about 40 COVID-19 cases.

“While level 4 restrictions were in place for most of April, the gradual return to level 1 over the course of the quarter meant that businesses were able to open up again and many people returned to places of work,” Pascoe said.

New Zealand, the government of which has been praised worldwide for its management of COVID-19, returned to normality in June.

However, in mid-August it re-confined the 1.7 million inhabitants of Auckland, the most populous city in the country, when a new outbreak of the virus emerged after 102 days without local transmission.

Authorities still maintain low-level restrictions in Auckland, limiting gatherings to 10 people and requiring the use of masks on public transport, measures that are expected to be relaxed next week.

New Zealand has accumulated 1,451 cases since the start of the pandemic, including 25 deaths and 79 active cases. EFE-EPA


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