Source: MIL-OSI Submissions
The forecast reveals large reductions in output in the June quarter, significant impacts on key sectors, and deeply negative business sentiment.
However despite concerns, the economy remains in relatively good shape compared with many other countries, with the ability for the Government to take on more debt if needed.
NZ’s net debt, forecast to increase from around 20% of GDP at the start of 2020 to around 50% by 2022, is still one of the lowest in the developed world.
“The Government has increased debt levels to provide appropriate support and stimulus for the economy. It should now also take steps to reduce the regulatory burden on businesses during the period of highest impact from the coronavirus, as NZ’s ability to ride out the Covid-19 crisis depends squarely on business,” BusinessNZ Chief Executive Kirk Hope said.
The BusinessNZ Economic Conditions Index sits at -6 for the June 2020 quarter, up 3 on the previous quarter but down 9 on a year ago, because of initial declines in key economic indicators as the impact of the coronavirus emerges.
The Index tracks 33 economic indicators including GDP, export volumes, commodity prices, inflation, debt, and business and consumer confidence.