New Zealand suf­fers worst slump since Thir­ties

The Daily Telegraph - Business - - Business - By Lizzy Bur­den

NEW ZEALAND has plunged into re­ces­sion for the first time in a decade, forc­ing prime min­is­ter Jacinda Ardern to de­fend her pan­demic re­sponse ahead of next month’s gen­eral elec­tion.

The na­tional data agency Stats NZ said the 12.2pc con­trac­tion from April to June was “by far the largest” on record, with the coun­try strictly locked down and its bor­ders closed for al­most two months. The con­struc­tion and man­u­fac­tur­ing sec­tors fell par­tic­u­larly sharply. Dur­ing the Great De­pres­sion,

GDP dropped by 5.3pc in 1931 and a fur­ther 7.1pc in 1932.

Ms Ardern re­jected op­po­si­tion ac­cu­sa­tions that the mea­sures had pushed the econ­omy “off a cliff ”, adding that New Zealand’s coro­n­avirus death toll – 25 out of a pop­u­la­tion of five mil­lion – com­pared favourably with other coun­tries.

Her aim has been to elim­i­nate the virus al­to­gether, rather than only to con­tain its spread.

“Suc­cess for me is sav­ing peo­ple’s lives, sup­port­ing and sav­ing peo­ple’s busi­nesses, com­ing out the other side faster, quicker and with more ac­tiv­ity,” she said. “I back our re­sults.”

A re­bound in the July-Septem­ber quar­ter, when re­stric­tions were eased, would fol­low the eco­nomic pain of lock­down in the June quar­ter, she added. Jar­rod Kerr, chief econ­o­mist at Ki­wibank, said: “The fo­cus must now turn to the re­cov­ery. And the cur­rent quar­ter looks pretty good.”

Ms Ardern’s gov­ern­ment has pumped bil­lions of dol­lars into the econ­omy, with its net debt expected to rise from about 20pc of GDP be­fore the pan­demic to 54pc by 2023.

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