A strict nationwide lockdown to fight the coronavirus led to the great depression.
New Zealand facing a sharp economic shock, GDP fell 5.3% in 1931 and a further 7.1% in 1932.
The data are unlikely to weaken Prime Minister Jacinda Arden’s chances of winning the election.
New Zealand is suffering from a worst economic slump since, the great depression that has occurred due to a strict nationwide lockdown to fight against the Coronavirus, that brought the country to a halt. The economy has plunged into recession for the first time in a decade and according to the national statistics agency, there is a 12.2 percent fall in quarterly GDP that seems to be the largest on record in New Zealand. It is the biggest three-month shrinkage that has occurred since quarterly records began in 1977.
According to academic research, New Zealand is facing a sharper but shorter economic shock than it experienced in the time of depression that occurred when GDP fell 5.3 percent in 1931 and an additional 7.1 percent in 1932. The South Pacific nation was successful in eradicating community spread of the virus, letting it to arise early from lockdown.
The closure of New Zealand’s borders since March 19 has also brought a huge impact to some sectors of the economy, said Stats NZ spokesman Paul Pascoe. He added, “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 nationwide lockdown”.
As per the statistics, the GDP fell a revised 1.4 percent in the first quarter of the year. The data might turn into a reason which would weaken the chances of winning a second term election for Prime Minister Jacinda Ardern’s.