Kiwis enjoy coronavirus freedom while Jacinda Ardern prepares for economic turbulence

There's no escaping a brutal recession of up to 10 per cent this year according to one New Zealand economist, with a "tourism-sized hole in our economy".

New Zealand

A windsurfer reels in his kite at New Brighton Beach in Christchurch, New Zealand Source: AAP

New Zealand's government has swung its hastily assembled public information campaign behind an economic push after it's last active case of coronavirus was cleared.

Previous messaging around social distancing and contact tracing has been pushed to the side, replaced by information around "wellbeing" and "jobs and training".

The policy pivot from Jacinda Ardern's government is a remarkable measure of how well New Zealand has fought back the virus.

NZ Prime Minister Jacinda Ardern speaks to the media
Source: Getty Images

Since the first case appeared on 28 February, the Kiwi government ramped up to a 51-day lockdown and has now eased off on all restrictions except for border controls.

The pivot is also a sign of the suffering that Kiwis can expect to face in the next phase of the pandemic.

"We're all enjoying the easing of the disruptions but we can't mistake that for a sign the upcoming recession won't be bad. It will be," ANZ New Zealand chief economist Sharon Zollner told AAP.

"It's fantastic we don't have any COVID-19 and people are comfortable, they can go to the rugby, they can go dancing, they can go out and about, and that is worth a lot for wellbeing beyond the economic. 

"It doesn't mean we're not going to have a hard recession. There is a tourism-sized hole in our economy."

Ms Zollner said international tourism accounted for five per cent of the Kiwi economy.

Her bank's latest projection was New Zealand's GDP would be eight to 10 per cent smaller this Christmas than it was last year and that unemployment will be "in the low double digits".

In pubs around the country, Kiwis leapt up to embrace each other when the restrictions eased on the stroke of midnight .
Source: TVNZ

In last month's budget, the NZ government predicted GDP will shrink by 4.6 per cent in 2020, with unemployment peaking at 9.8 per cent.

Prime Minister Jacinda Ardern admits much now depends on the ability of Kiwis to retrain and move into other sectors. 

"Horticulture, the dairy industry, they desperately need workers so we need to support people into those jobs," she told 1News on Tuesday.

"The early signs are that we are on the optimistic side of recovery.


"Things are coming back into play a bit more quickly but we know it will take time.

"We know people have lost work, be it in tourism or otherwise ... we'll be utterly focused on jobs, jobs, jobs."

The budget included a $NZ1.6 billion ($A1.5 billion) package towards apprenticeships and trades, noting that Australia will be competing for the same labour market after the establishment of a trans-Tasman bubble.


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Published 9 June 2020 at 5:27pm, updated 9 June 2020 at 8:15pm