It’s official New Zealand is in a recession, but only just. The big question now is how long until we’re out the other side? Political Editor Jenna Lynch has more. ➡️ SUBSCRIBE:

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New Zealand Officially in Recession – But How Long Until We’re Out the Other Side?

The news broke recently that New Zealand has officially entered into a recession, marking the country’s first technical recession in over a decade. The COVID-19 pandemic and the subsequent economic fallout have taken a toll on the nation’s finances, with two consecutive quarters of negative growth. However, the big question on everyone’s mind is how long it will take for New Zealand to bounce back and emerge from this downturn.

The official declaration of a recession comes as no surprise, given the unprecedented challenges faced by the global economy due to the pandemic. The nationwide lockdown imposed earlier this year severely impacted various sectors, including tourism, hospitality, and retail. International borders remain closed, and with limited domestic spending, businesses have struggled to generate revenue, leading to job losses and lower consumer confidence.

The New Zealand government has taken steps to mitigate the economic impact through various measures, including the wage subsidy scheme and support packages for affected industries. These initiatives have provided temporary relief, preventing a more severe downturn in some sectors. The Reserve Bank of New Zealand has also implemented monetary policies to stimulate the economy and ensure stability in financial markets.

Additionally, the successful containment of the virus in New Zealand has led to an easing of restrictions, allowing businesses to reopen and operate with fewer constraints. The resumption of economic activity is a crucial step towards recovery, but the path to full recuperation is not without obstacles.

One of the biggest factors influencing the duration and strength of New Zealand’s recovery is the global situation. As a small, trade-dependent nation, New Zealand’s economic health is closely tied to global trade dynamics. The ongoing global recession and uncertainty in major markets like the United States, Europe, and Australia will undoubtedly impact the pace of recovery. The sluggish demand for exports, such as dairy and meat products, could hinder New Zealand’s ability to bounce back swiftly.

Furthermore, the country’s tourism sector, which has historically contributed significantly to the economy, remains crippled. With international travel restrictions likely to continue for the foreseeable future, the recovery of this industry may take much longer than anticipated. The government’s recent announcement of a $400 million tourism recovery fund is a step in the right direction, but the road to recovery for this sector will be challenging.

Nevertheless, cautious optimism remains for New Zealand’s recovery. The country’s strong healthcare system, effective handling of the pandemic, and proactive government policies have provided a solid foundation for recovery. The nation’s diverse export base and solid agricultural industry are also potential buffers, capable of stimulating economic growth.

Many economists predict a U-shaped recovery for New Zealand, meaning that the economy will experience a more gradual rebound rather than a sudden bounce back. The timeline for this recovery is uncertain, with estimates ranging from six months to several years, depending on various factors.

Additionally, the development and widespread distribution of a COVID-19 vaccine will significantly impact the speed of New Zealand’s recovery. A successful vaccine would instill confidence in international travel and lead to a resurgence in the tourism industry. However, until a vaccine is readily available, it is essential for the government and businesses to continue supporting affected industries and exploring alternative opportunities for growth.

As New Zealand officially enters into recession, the road to recovery may be long and arduous. However, with effective government interventions, resilience, and a global economic rebound, there is hope that the country will emerge stronger from this downturn. While the duration of this recession will depend on various internal and external factors, New Zealand’s ability to adapt and innovate may be the key to a quicker recovery.