New Zealand inches towards recession after nearly 10 years of growth
Sydney, Australia, June 18 (efe-epa).- New Zealand recorded a 1.6 percent drop in its gross domestic product in the first quarter of 2020 amid the impact of the COVID-19 crisis, and is heading towards recession after nearly a decade of economic growth.
New Zealand’s statistics office on Thursday reported the quarterly decline – the biggest drop since a 2.4 percent decline recorded in March 1991 – which coincided with the implementation of a travel ban and lockdown in the country.
“Gross domestic product (GDP) fell 1.6 percent in the March 2020 quarter, the largest drop in 29 years, as the initial effects of COVID-19 restrictions impacted on economic activity,” Stats NZ said in a statement.
“This quarter’s GDP results showed a widespread drop in economic activity as travel restrictions took hold and the country moved towards lockdown. COVID-19 effects came on top of the smaller impact from drought in some parts of the country,” it added.
If a further drop in the second quarter – between April and June, which were the toughest months of the epidemic in New Zealand – is confirmed, the country will officially enter into recession.
“The biggest impact of the global recession and Alert Level 4 public health restrictions will be seen in the current June quarter,” New Zealand Finance Minister Grant Robertson said in a statement.
He added that the figure was in line with economist predictions and assured that annual average GDP was up 1.5 percent from a year ago.
“We’ve always acknowledged that the global COVID-19 pandemic, and the measures put in place to protect New Zealanders will impact the March and June quarter GDP data. These measures have allowed us to get back to Level 1 more quickly than expected, and operate at levels that other countries aren’t able to,” Robertson said.
New Zealand has received international praise for its early and effective response to the pandemic at a time when it had reported only 50 cases.
The country has so far recorded 1,157 confirmed cases, of which three are active, along with 22 deaths. EFE-EPA