The latest set projections from ASB, the banks sees 2020 GDP falling 5.9% in New Zealand
down 15% q/q (annualised) in Q2
COVID-19 has been a game changer to both the NZ and global economic outlook. 2020 will be a very challenging year, with pronounced quarterly volatility. A sizable contraction in NZ GDP over 2020 looms, which will be larger than the early 1990s and Global Financial Crisis (GFC) recessions but will hopefully prove more short-lived.
The Government and RBNZ have stepped up and their actions should help to mitigate the economic hit, with likely job losses and falls to house prices less severe than they could have been.
The economy will recover. It always does. However, balance sheet constraints and weaker potential output growth will temper the rebound. We are not expecting a typical cyclical recovery - it's not a typical time