New Zealand Economy to Enter Recession: Reuters Poll
Arslan Butt • 1 min read
According to economists recently polled by Reuters, New Zealand’s economy is expected to see the steepest contraction ever recorded during Q2 2020, which will push the country into recession, as a result of the coronavirus pandemic and related lockdowns. Economists have forecast a median contraction of 12.8% QoQ and 13.3% YoY for the second quarter of the year, a far worse reading than the 1.6% contraction seen in Q1.
The contraction for two consecutive quarters will drive New Zealand towards its first recession in a decade. On a positive note, however, its economy has likely rebounded at a fast pace after the lockdown restrictions were lifted.
The country was one of the first to ease restrictions and reopen its economy after a strict lockdown, and has since seen activity bounce back despite experiencing a second wave of cases after reporting no new cases for over 100 days. ANZ Bank has also revised its Q2 GDP forecasts lower, from 12% previously to 17.5% but expects the economy to bounce back in Q3 by growing at the fastest pace ever recorded.
Later this month, the RBNZ is widely expected to keep the cash rate unchanged at 0.25%. In August, the central bank had confirmed that it would keep the cash rate at this level until early next year.