ANZ warns of a material risk of a double-dip recession from Q4 2020
ANZ on the New Zealand economy, saying that while the bounce back for the economy out of lock down has been strong it may not last
- Forward GDP indicators have bounced back vigorously out of lockdown. That's great news, and to some extent expected given the low base - but how long will it last?
- There are a number of temporary factors supporting the bounce, including pent-up demand, unseasonably strong domestic tourism during the colder months, and temporary income support and job retention measures.
- High-frequency economic indicators may remain on a stable to improving trajectory into September, but our analysis suggests that by November at the latest the mood is likely to turn. By then, some temporary supports expire and the impacts of a closed border will become more acute.
- Uncertainty is extreme. And while not our forecast, we think there is a material risk that the economy enters a double-dip recession from Q4 2020.