New Zealand has entered a recession
New Zealand Prime Minister Chris Hepkins. Marty Melville/AFP
This is the country’s first recession since 2020, when the pandemic kept its borders closed and weighed on its exports.
New Zealand entered a technical recession at the beginning of the year, recording a second consecutive quarterly contraction in its economy by 0.1%, according to figures from Stats NZ statistics agency released on Thursday, June 15th. The drop in GDP for the first three months follows a 0.7% drop in the fourth quarter of 2022. A technical recession is defined as two consecutive quarters of economic contraction.
This is New Zealand’s first recession since 2020, when the pandemic kept its borders closed and weighed on its exports. According to Finance Minister Grant Robertson, this result “Not a surprise”In the face of a global economic downturn, high inflation and devastating weather in the North Island. January floods in Auckland, the country’s largest city, then damage caused by Hurricane Gabriel the following month tipped the balance. The government estimates the cost of repairs to be NZ$15 million (€8.5 million).
Meanwhile, the inflation rate in March 2023 stood at 6.7% in one year.