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Coronavirus crisis: New Zealand plunges into recession as economy shrinks record 12%

Wellington
September 17, 2020

New Zealand's economy plunged into recession for the first time in a decade on Thursday, posting a record contraction in the June quarter due to the Coronavirus pandemic, as Prime Minister Jacinda Ardern heads into next month's general election.

"The 12.2 % fall in quarterly GDP is by far the largest on record in New Zealand," the National statistics agency said.

The reporting period covers April to June, coinciding with a strict lock down that began in late March and began easing in late May. Stats NZ spokesman Paul Pascoe said the closure of New Zealand's borders since March 19 had also had a huge impact of some sectors of the economy.

"Industries like Retail, Accommodation, Restaurants and Transport saw significant declines in production because they were most directly affected by the international travel ban and strict nationwide lock down," he said.

"Other industries like food and beverage manufacturing were essential services and fell much less." The second-quarter decline follows a 1.6 % contraction in the first three months of 2020, confirming widespread expectations that New Zealand is in recession.

However, the 12.2 % figure was below the 16 % predicted by the government this week and fell well short of the 23.5 % forecast in the budget last May.

Finance Minister Grant Robertson said the better than expected outcome was due to policies implemented by Ardern's government, which will go to the polls seeking a second term on October 17.

"Going hard and early means that we can come back faster and stronger," he said.