New Zealand Economy Falls Into Recession, First Since 2020
First Published: 15th June, 2023 8:33 IST
This is New Zealand's first recession since 2020, when the pandemic shuttered borders and choked exports.
New Zealand’s agriculture-driven economy has fallen into recession, according to official data released Thursday, with a damaging cyclone fuelling a widespread downturn just months before national elections.
As per a report published NDTV, Stats NZ signalled the economy had contracted 0.1 percent in the first quarter, after a fall of 0.7 percent at the end of 2022.
Four months before the general election, centre-left finance minister Grant Robertson admitted that entering recession was “not a surprise”.
“We know 2023 is a challenging year as global growth slows, inflation has stayed higher for longer and the impacts of North Island weather events continue to disrupt households and businesses,” he said.
January flooding in Auckland and destruction caused by Cyclone Gabrielle in February both weighed on the economy.
The government estimates it will cost up to NZ$15 million (US$9 million) to mop up the damage caused by the extreme weather.
This is New Zealand’s first recession since 2020, when the pandemic shuttered borders and choked exports.
With the economy shrinking, inflation hitting 6.7 percent and an October 14 election approaching, the centre-right opposition was quick to point blame at the government.
“Red lights are flashing for the New Zealand economy, which has shrunk even while inflation rages on,” said opposition finance spokesperson Nicola Willis.
Agriculture, manufacturing, transport and services all saw declines.
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