Historic decline of the New Zealand economy in 2020

The New Zealand government said Thursday that New Zealand’s economy recorded a historic contraction of 2.9% in 2020 due to the impact of the pandemic. New Zealand’s official statistics agency said the archipelago’s gross domestic product contracted by 1% in the fourth quarter of 2020, a smaller drop than in the first two quarters. Over the year as a whole, the decline was the largest since these statistics were published. “The decline in annual GDP is mainly due to the effects of the national lockdown earlier in 2020The agency said.

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New Zealand experienced very strict containment in March and April, which contributed greatly to containing the spread of the epidemic. The country is regularly praised for its highly effective response to Covid-19, which has claimed only 26 lives out of five million. After two consecutive quarters of contraction, New Zealand’s GDP rebounded by 13.9% in the third quarter. Kiwibank chief economist Jarrod Kiir said the 1% contraction in the fourth quarter was stronger than expected, which he said was due to fluctuations caused by the epidemic.

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He added that the absence of foreign tourists means that growth is also expected to be negative in the first quarter of 2021, which will technically put the country into a recession. “The vaccine rollout and travel bubble talks with Australia, and possibly other countries, mean that growth is expected to be strong in 2022.»