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New Zealand has a large GDP for its size and population. Negative interest rates should — in theory — have the same effect. The GDP data confirms New Zealand's worst recession, defined as two straight quarters of contraction, since 2010, with GDP in the March quarter falling 1.6 percent. The Reserve Bank of New Zealand had forecast a quarterly and annual GDP decline of 14 percent in its August statement. Have a confidential tip for our reporters? In its interest rate decision this week, the central bank maintained its official cash rate at 0.25%, but also raised the possibility of going into negative territory. READ MORE: * Coronavirus: Job ads dive in Australia as deficit heads towards WWII record * Business confidence sinks but ANZ warns the worst may be yet to come * 'No-brainer' to delay minimum wage increase - or is it? “It is proof that getting on top of the virus is the best thing we can do for our economy.”. The fund (IMF) expects the global economy to contract by about 3 per cent in 2020, a much sharper fall than that experienced after the global financial crisis. The decline is expected to be worse in the June quarter, according to its finance minister. This page has economic forecasts for New Zealand including a long-term outlook for the next decades, plus medium-term expectations for the next four quarters and short-term market predictions for the next release affecting the New Zealand economy.

"Our current forecasts incorporate a scenario that is similar to scenario one in the Treasury projections – that we only have to spend one month in lockdown. Overview GDP Labour ... -term expectations for the next four quarters and short-term market predictions for the next release affecting the New Zealand economy. The second-quarter contraction was driven by service industries, particularly hospitality and accommodation as international travel stopped, the statistics agency said. The South Pacific nation initially succeeded in eliminating community spread of the virus, allowing it to emerge early from lockdown, and indicators suggest growth surged in the third quarter as consumers went on a spending spree. "Because the economic fallout is acute in specific sectors, policymakers will need to implement substantial targeted fiscal, monetary, and financial market measures to support affected households and businesses domestically. We expect the negative effects will be much more persistent over the coming years. … As a result, net government debt is expected to … That prompted authorities to lock down the city again on Wednesday. Official data tomorrow will confirm the economy contracted for a second straight quarter in the three months through June, the nation’s first recession since 2010, though Treasury and bank economists have significantly scaled back the expected severity of the slump. “Covid-19 has left tens of thousands more people working less hours than they want, resulting in less stable incomes and more uncertainty for families,” said Marama Davidson, the party’s co-leader.

The government’s pursuit of an elimination strategy saw it impose one of the strictest lockdowns in the world but allowed a quicker resumption of economic activity once the virus was contained. Before it's here, it's on the Bloomberg Terminal. "That seems a safer strategy than trying to be clever and pick when the improvement comes. Deficits are likely to narrow but won’t disappear until at least 2034.Net debt is expected to surge to NZ$130.2 billion or 43% of GDP at June 30, 2021. It has released its latest World Economic Outlook, which notes that the pandemic is having a severe impact on economic activity around the world, as well as inflicting "high and rising" human costs. ASB Economics said the result “quashed widespread expectations of a large increase” owing to workers abandoning the job hunt in lockdown; actively searching for a job is a requirement for someone to be officially classed as unemployed. Until such medical interventions become available, no country is safe from the pan­demic – including a recurrence after the initial wave subsides – as long as transmission occurs elsewhere.". Some economists said that when commercial banks have to pay to deposit funds with the central bank, instead of earning an interest on those reserves, they should be encouraged to loan out that money instead.

Economists forecast a 12.5% decline. ANZ chief economist Sharon Zollner said the IMF predictions told a similar story to those of her team. People wait for a walk-up Covid-19 test on August 14, 2020 in Auckland, New Zealand.

Negative interest rates should — in theory — have the same effect. U.K. GDP plummeted 20.4% in the second quarter from the first and 21.7% from a year earlier. Before it's here, it's on the Bloomberg Terminal. "We expect the June quarter's record-breaking GDP decline to be followed by a record-breaking rise in the September quarter," said Westpac Senior Economist Michael Gordon. The International Monetary Fund says New Zealand's economy will shrink by 7.2 per cent this year as the effect of the Covid-19 outbreak, and subsequent lockdown, hits. Photograph: Fiona Goodall/Getty Images A u s t … Gross domestic product contracted a seasonally adjusted 12.2 percent quarter-on-quarter, its sharpest quarterly contraction on record and largely in line with forecasts of a 12.8 percent decline from economists polled by Reuters. Auckland lockdown is a 'disappointing' development, says central bank governor. When asked how ready New Zealand banks were for a move to negative rates, Orr said the "vast bulk of banks are ready.". "If it turns out New Zealand is not successful in getting Covid under control and have to spend more time in lockdown then clearly that will have a greater negative impact for the economy.".

He added that he did not want to be "held hostage at all" by banks saying they weren't ready. Still, in the medium term GDP growth is projected to be slower than the budget showed. October 12, 2020 at 5:00 AM EDT.

"The banks themselves know that they are on notice to be operationally ready by at least December," he said.

After all, no miracle has just happened to give them, the IMF, Treasury or anyone else an ability to predict outturns which clearly none of us possessed three months ago.".

Treasury projects bigger budget deficit in current year, Fiscal update released less than five weeks before election.

“Being able to reopen our economy sooner has saved jobs,” he said.

Nor is the Covid slump as bad as initially feared. Treasury tipped a 16% contraction, much less than the 24% it forecast in May, and said there are risks the decline may be even less. Advanced economies, including the United States, United Kingdom and eurozone are predicted to contract by 6.1 per cent this year, and emerging markets by 1 per cent. ANZ is expecting an 8.8 per cent reduction this year and 4.1 per cent growth in 2021. Labour force participation and overall employment have also fallen as people left the workforce entirely.

New Zealand's economy shrank 1.6% in the March quarter, the largest drop in 29 years. 10/07/2020 Sign up for free newsletters and get more CNBC delivered to your inbox. "We see a slightly larger fall this year and a smaller bounce-back next year but the profile is similar.". Yet, as he acknowledged, the headline result doesn’t tell the full story. New Zealand’s unemployment rate has stunned economists by dropping from 4.2% to 4% after one of the world’s strictest coronavirus lockdowns. The economy of New Zealand is a highly developed free-market economy. Data is a real-time snapshot *Data is delayed at least 15 minutes. However, the 12.2% figure was below the 16% predicted by the government this week and fell well short of the 23.5% forecast in …

Economists say the GDP data will have little impact on the central bank's policy, which is expected to hold interest rates at a record low of 0.25 percent at its meeting on September 23. Further waves of the virus pose a key risk ahead. Updates with economist comment in eighth paragraph. The fund (IMF) expects the global economy to contract by about 3 per cent in 2020, a much sharper fall than that experienced after the global financial crisis.

By June 2024 debt will blow out to NZ$201 billion or 55.3% of GDP –- a slightly higher ratio than projected in the budget because the economy won’t be as big.Still, low interest rates mean finance costs are forecast to reduce, while an improved government cash position will allow the Treasury to reduce its debt program. Today’s report confirms the first recession -- defined as two consecutive quarters of economic decline -- since 2010. Nation’s strict lockdown caused record second-quarter slump, Economists predict third-quarter bounce after virus contained.

Available for everyone, funded by readers. “Today’s unemployment figures don’t tell the full story of the jobs crisis we’re in as a country and are masked by the 452,425 people on wage subsidies,” he said. ASB expected a smaller decrease this year but a slower recovery. New Zealand has recorded 1,451 confirmed cases of Covid-19 and just 25 deaths. New Zealand Debt Management today cut its 2020-21 bond sales program by NZ$10 billion to NZ$50 billion. Fiscal and monetary policy still has its work cut out.”.

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