New Zealand yesterday plunged into recession for the first time in a decade, as data confirmed a record economic collapse that forced New Zealand Prime Minister Jacinda Ardern to defend her response to the COVID-19 pandemic ahead of next month’s general election.
The 12.2 percent contraction in the second quarter was “by far the largest” since records began, national data agency Stats NZ said, with the country put into a lockdown for almost two months and its borders closed.
Ardern rejected opposition accusations that the measures had pushed the economy “off a cliff,” saying the restrictions helped contain the virus, which allowed business to resume far earlier than in many other countries.
Photo: EPA-EFE
Ardern, who faces a re-election challenge on Oct. 17, also said that New Zealand had recorded just 25 COVID-19 deaths out of a population of about 5 million.
“Success for me is saving people’s lives, supporting and saving people’s businesses, coming out the other side [of the pandemic] faster, quicker and with more activity,” she told reporters. “I back our results.”
The economic pain of lockdown in the second quarter would be followed by a rebound this quarter, when virus-related restrictions were eased significantly, she said.
New Zealand Minister of Finance Grant Robertson said it could have been much worse, with budget papers in May predicting a 23.5 quarterly decline and the New Zealand Treasury forecasting a 16 percent drop just this week.
“There is no way that any political party could claim that there would not have been a recession in New Zealand during this period,” Robertson said. “This is a one-in-100-year global economic shock.”
The opposition National Party said that the figures showed a change of government was needed because Ardern’s administration could not properly manage the economy or the pandemic response.
“It is now official that we are in the deepest recession in living memory and it’s proof that New Zealand needs a National-led government now that has a very clear plan,” National leader Judith Collins said.
New Zealand “compares very unfavorably” with neighboring Australia, which recorded an economic contraction of 7 percent in the second quarter after adopting a more flexible approach to lockdowns and border controls, Collins said.
New Zealand’s most recent recession was in 2008-2009 and until the first three months of this year it had recorded non-stop quarterly growth since 2010.
The second-quarter decline follows a 1.6 percent contraction in the first three months of this year, confirming widespread expectations that New Zealand is in recession.
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