New Zealand’s economy has entered a recession: Business Editor-at-Large Liam Dann explains exactly what that means.
Video / NZ Herald
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New Zealand’s Economy Enters a Recession
In recent news, New Zealand’s economy has officially entered a recession for the first time in over a decade. The impact of the Covid-19 pandemic, coupled with various other internal and external factors, has caused a significant contraction in the country’s economic output.
According to reports by the New Zealand Herald, the country’s Gross Domestic Product (GDP) fell by 12.2% in the second quarter of 2020. This decline is the largest ever recorded and highlights the severity of the recession that the nation is currently facing.
The Covid-19 pandemic has undoubtedly played a major role in pushing New Zealand into a recession. The global health crisis led to strict lockdown measures, including border closures and restrictions on domestic movement. These measures severely disrupted various sectors of the economy, such as tourism, hospitality, and retail, leading to massive job losses and business closures.
The decline in international tourism has been particularly damaging for New Zealand. The country is renowned for its picturesque landscapes, adventure sports, and cultural attractions, which draw millions of tourists each year. However, with borders closed, international visitors have dried up, resulting in a significant blow to the tourism industry – one of the primary drivers of the New Zealand economy.
Furthermore, while the pandemic has been a major catalyst for the recession, other pre-existing challenges have exacerbated the economic downturn. Prior to Covid-19, New Zealand was already experiencing a slowdown due to a decreasing housing market, declining business confidence, and a weakening global economy.
Trade tensions between major economies have also impacted New Zealand’s economy. The ongoing trade dispute between the United States and China has created uncertainty, affecting global markets and demand for exports, including New Zealand’s agricultural products and commodities. This decline in demand for exports has added further strain to the already struggling economy.
Despite the bleak economic outlook, the New Zealand government has implemented a range of measures to mitigate the impacts of the recession. The central bank has cut interest rates to historic lows, and the government has implemented fiscal stimulus packages, providing financial aid to affected businesses and workers. These measures aim to boost economic activity and encourage a swift recovery.
However, the road to recovery may not be easy. The global economic landscape remains uncertain due to the ongoing health crisis and geopolitical tensions. The resurgence of Covid-19 cases in several countries has raised concerns of a potential second wave, which could further disrupt global trade and stifle economic growth.
New Zealand’s economy entering a recession serves as a reminder of the interconnectedness of the global economy. No country is immune to the economic turmoil caused by events like the Covid-19 pandemic and international trade disputes.
As the nation grapples with this recession, it will be crucial for the government to continue implementing effective economic policies to support businesses and workers. Additionally, diversifying the economy and reducing its reliance on sectors like tourism may be necessary to build resilience and ensure a sustainable recovery.
While the road to recovery is long and uncertain, New Zealand has shown resilience in the face of past challenges. With the right strategies and support, there is hope that the nation can navigate this recession and emerge stronger than before.
But but but I spoke to Anna Lorck and she said NZ wasn't going to go into recession…
We are all being feed B.S.
How does raising interest rates improve the situation?. The RBNZ and Government makes more money. New Zealand is in serious trouble and theres a massive human-rights crisis here, and that's being able to have access to affordable housing, rentals and mortgages etc which has been persisting for far to long. Big Government has done f# all, you're even taxed on your social security. Another big problem in this country is, that residents pay far to much on income tax. If this was reduced, it would help reduce poverty and give everyone more incentive to work, especially the ones that would rather stay on a benefit.
Economists in Australia and NZ see that the RBNZ and the Labour party throw the NZ economy into an unnecessary recession for their political needs. As a result, people suffer and become homeless.
This is not the government Kiwi would want for another 3 years.
Another friend of the U S A ended up under the bus.
Recession is often the result of external factors, and it appears that the United States is losing its grip as a federal reserve currency. With a decreasing ability to control inflation and a reduction in stocks and oil trading, it seems that a new multilateral world order is on the horizon.
Self reliant is must….too much over dependence on China, Australia and OIC nations is to be controlled
Stop the rates rices and tax more of the people getting richer at the expense of the poor getting poorer. Via Corporate Welfare and tax dodging.
The tax machine needs to be fed. If a virus or storm comes the machine needs food thus inflation maintains any shortfall of lost earnings.
The recession means the machine is hungry and it needs feeding.
I just wanna say right here because there is fairly decent exposure here, if you cut down on meat completely. This recession will be felt much shorter and less painful.
If we don''t, it will be long and hard and angry "natural disasters" will pound our crops and slam farmers continuously.
Cut it down, NOW. Spread it on social media like wildfire burning California.
Prepare for the new financial reset. We have already joined BRICS,
now we just need to wait until our banks close and we lose all our savings!
Buy Gold and Silver!
Yet all the "economists" got it wrong again.
Life is an unsettling and beautiful experience when you step back and consider it. It's possible that working with a financial analyst will help you succeed in life. I made passive income from my portfolio this year, while others were whining about the downturn, I'm delighted I was able to get in touch with my instructor, Andrew Glenn Adams, earlier this year.
What happened to Aotearoa? Only seem to say New Zealand these days when bad stuff happens. The usual media psyop.
Amazing straight news…
New Zealand needs to really build its domestic market and invest heavily. We need to be less reliant on other countries. Start building more things here.
Of course we have. The world is suffering recessions so sales are down and the Ukrainian war has had global effects where ripples are getting to us now re our economy.
Didn't I say this how long ago long ago "
Not a hard one to work out wat happens
Usa happens Australia and nz :"
An with the system the way it is that
Will always be the case "
Solution I've explained no one thought
Clearly did they ' no they didn't at all even
Think about it …..
Laurence
Huge thanks to Labour-Green government. Just keep doing what you are doing, NZ will falling deeper for sure.