This pandemic is not over yet – not by a long shot

The announcement of community transmission of COVID-19 in August has been a reality check on our progress towards recovery. With Auckland now under Alert Level 3 restrictions, and the rest of New Zealand at Alert Level 2, the economic outlook has turned darker. This note provides our initial analysis of the economic effects of the changes, as well as an update on how our view of the economic outlook is changing.

Chart of the month – Where did you come from, where did you go?

The New Zealand border has been closed since March, and with it, international tourism has all but vanished. International arrivals in July were 98% lower than a year ago, with only 3,521 arrivals. But even though there aren’t many new visitors arriving, there are quite a few still in New Zealand. Data published by StatsNZ estimates there to be somewhere between 90,000 and 140,000 international tourists currently residing across the country, which has implications for employment and support needs.

Employment to be key Election 2020 battleground

With the 2020 Election in September closing in fast, Infometrics has again examined how the economy has performed this electoral term and what that might mean come election day. Yet as New Zealand heads to the polls in just under three months, there needs to be a much greater focus on how to rebuild the economy. Jobs, and how to keep and create them, will be the defining issue of Election 2020.

A delayed, but not denied, economic effect

New Zealand’s swift shift towards Alert Level 1 has seen the economy regain momentum more quickly than we had anticipated in the initial stages of the pandemic. Despite a feeling of cautious optimism around the country, we believe those gains will be lost as the economic realities of COVID-19 set in, with New Zealand an isolated lifeboat amid a tempest of global mayhem.

Media release: Economic fall-out of COVID-19 to be fully felt in 2021

New Zealand’s successful public health response to the COVID-19 pandemic should not be taken to mean our economic struggles are over, according to Infometrics’ latest forecasts. Given that life has largely returned to “normal” at Alert Level 1, economic outcomes in the near-term will be better than initially feared. However, the full effects of the border closures, business failures, and job losses will only become apparent over the next 18 months.