Media Release: Economy to bounce back as we learn to live with Delta

Confidence remains that the New Zealand economy can weather the Delta outbreak and bounce back strongly again from lockdown, according to Infometrics’ latest economic forecasts. Infometrics predicts that household spending will once again be in “catch up” mode when alert level restrictions are eventually eased. Business confidence also shows that, overall, firms remain optimistic about a return to normal.

Don’t be complacent about agriculture’s ability to rescue us

The massive increase in tourist numbers coming to New Zealand between the Global Financial Crisis and the COVID-19 pandemic is well documented, lifting from under 2.5m in 2008 to 3.9m in 2019. But it’s perhaps less well-known that agriculture and forestry exports held their own during this period, with their share of total exports increasing from 44% to 49%.

Counting the cost of the Delta Lockdown

The bounce back from Lockdown 2.0 has begun, but the overall recovery has been restrained by Auckland remaining at higher alert levels. Auckland’s move to Level 3 is welcome news, with a larger amount of economic activity to take place. But risks remain for the pace of New Zealand’s rebound, with supply chain issues and the need to balance health and economic priorities creating a difficult set of choices.

Monday the most popular day to stay home

The COVID-19 pandemic has brought about some fundamental changes to both New Zealand and the world – including supercharging a shift in working patterns and locations. Working from home first became a necessity during Alert Level 4 in April 2020, and the rush to equip businesses and workers to operate away from the office has sparked a trend that appears here to stay. The latest Level 4 lockdown has doubled down on this focus, as business sought to keep operations going. Offices and urban centres aren’t a thing of the past – not by a longshot. But as our analysis shows, New Zealanders are working, travelling, and spending differently.

Chart of the Month: How long until interest rate rises hit borrowers?

The Reserve Bank’s August 2021 Monetary Policy Statement made it clear that interest rates will continue to be pushed higher. Demand conditions across the New Zealand economy are strong, but supply issues are creating heightened labour market and inflationary pressures.