New Zealand suffers worst slump since Thirties
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.