NZ officially in a recession for first time in 11 years

Author
Liam Dann, NZ Herald,
Publish Date
Thu, 17 Sep 2020, 10:48AM
Photo / Getty Images
Photo / Getty Images

NZ officially in a recession for first time in 11 years

Author
Liam Dann, NZ Herald,
Publish Date
Thu, 17 Sep 2020, 10:48AM

New Zealand is officially in its first recession for 11 years, a casualty of the Covid fallout hammering economies around the world.

This country's gross domestic product (GDP) shrank by a record 12.2 per cent in the June quarter as the Covid-19 lockdown and border closures stalled economic output.

It was the second successive quarter of negative growth - the technical measure of a recession.

Economists had been forecasting a fall of between 11 per cent and 14 per cent.

However forecasts had improved dramatically since the closure of boarders and initial lockdown.

At the time Treasury officials forecast a 23.5 per cent drop over the period.

More recently ANZ economists revised their pick - from a fall of 17.5 per cent to a fall of 12.5 per cent.

Under the current GDP framework - formulated in 1987 - New Zealand's biggest fall was a 2.4 per cent decline in the March 1991 quarter.

Stats NZ says that under the previous framework, which dates back to 1955, the largest fall was 4.4 per cent - in December 1977.

New Zealand's last recession ended in the June quarter of 2009.