The economy has shrunk by a record amount and fell into its first recession in a decade as it was battered by the government’s moves to eliminate Covid-19, but it will already be on the road to recovery.
Official numbers show gross domestic product (GDP) fell a seasonally adjusted 12.2 percent for the three months to June.
It followed a revised 1.4 percent fall in the first quarter and was the biggest fall since the current system of measuring data was introduced in 1987.
“Industries like retail, accommodation and restaurants, and transport saw significant declines in production because they were most directly affected by the international travel ban and strict nation-wide lockdown,” Stats NZ senior manager Paul Pascoe said.
The consensus of forecasts was for a fall of between 12-13 percent, but the Reserve Bank forecast more than 14 percent and Treasury 16 percent.
Service industries fell by 10.9 percent, with consumer spending falling more than 25 percent, but there were double digit falls for manufacturing, and construction.
The economy shrank by 12.4 percent on the same quarter a year ago, while the annual average growth rate fell to 2 percent.
More to come…