Economic forecasting’s spectacular failure around COVID-19

This time last year, the government closed the borders and then sent New Zealand into a lockdown that saw life virtually come to a halt. Amid this disruption, economists rapidly slashed their forecasts for GDP and employment. But economic activity has bounced back from lockdown largely unscathed, and the unemployment rate has only lifted from 4.2% to 4.9%. Why did forecasters get it so wrong?

Media Release: Double-dip recession next year, but housing rolls on

Despite rebounding well from the initial lockdown and effects of the COVID-19 pandemic so far, the New Zealand economy remains vulnerable, according to the latest projections from Infometrics. The company is forecasting a double-dip recession to hit during 2021, as delayed job losses punch a hole in consumer spending and drag economic activity lower.

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.

Vehicle registrations set to crash, but how bad will it get?

Back during Christmas 2017, car dealers must have had plenty to celebrate. Riding the crest of a wave of population growth and a prosperous economy, spurred on by the National-led Government’s open-door policy towards international migration, an unprecedented 274,000 new and used cars had been newly registered in New Zealand in the previous 12 months.

Media Release: Recovery likely to be slow, even with bold government initiatives

The New Zealand economy faces up to two years of consolidation following the COVID-19 pandemic, according to Infometrics’ latest forecasts released last week. Even with massive government intervention to cushion the downturn and stimulate a recovery, there is no way the economy can quickly and completely bounce back from the restrictions currently in place. Instead, the structural changes the New Zealand economy is undergoing will establish a new “normal” operating environment for businesses.

Well, that escalated quickly!

From a few concerns about the effects on Chinese tourism in late January to a full-blown pandemic and lockdown in New Zealand, the COVID-19 crisis has evolved rapidly over the last two months. We communicate just how quickly the economic ramifications have unfolded and examine how things might play out for the economy over the next 1-2 years.

Crisis Note: Brace for impact – readying for a pandemic and recession

The COVID-19 pandemic is causing economic chaos both internationally and in New Zealand. A recession is now inevitable, and the economic ramifications of the pandemic and response will substantially change people’s livelihoods. However, New Zealand is resilient and stands ready to weather this pandemic, and there are actions that can be taken to reduce the severity of the economic blow.