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New Zealand is in its worst cessation recession in decades, following drastic measures in response to the Covid-19 epidemic, which was praised.
The country’s GDP fell 12.2% between April and June, hit by lockdowns and border closures.
It is New Zealand’s first recession since the global financial crisis and its worst since 1987, when the current measurement system began.
But the government hopes its epidemic will recover quickly.
Nearly five million nations were soon declared virus-free, and although there are still many cases, only 25 have died.
The economy is likely to be a major issue in next month’s election, which was delayed after an unexpected spike in the Covid-19 cases in August.
Paul Pascoe, a spokesman for Statistics NZ, said the measures, which have been in place since March 19, have had a major impact on some sectors of the economy.
He said industries such as retail, housing and restaurants and transportation have seen a significant decline in production, as they have been hit hard by international travel bans and nationwide lockdowns.
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The government of Prime Minister Jacinda Ardern has said that the success of the crackdown on the virus helps the recovery process.
Finance Minister Grant Robertson said GDP numbers were better than expected, suggesting a strong recovery ahead.
“Going harder and faster means we can come back faster and stronger,” he said.
Some economists are also predicting a faster recovery due to New Zealand’s strong response to the virus.
“We expect record-breaking GDP decline in the June quarter after record-breaking growth in the September quarter,” said Michael Gordon, a senior economist at Westpac.
But Treasury forecasts released yesterday indicated that large debt and persistent setbacks are likely to delay full recovery.
The opposition National Party accused the government of lack of practicality which made its impact worse than it needed to be.
New Zealand had a more severe decline than neighboring Australia, where the lockdown was less intense.
But the state of Victoria is facing another lockdown, which is likely to weigh on Australia’s economic recovery.
