New Zealand expects strong economic change

SINGAPORE: Finance Minister Grant Robertson said on Friday that New Zealand was predicting a strong recovery for its economy in the three months to September.

Between April and June, after a quarterly crisis of 12.3% of GDP, the country plunged into a severe recession – two-thirds of negative growth in a row. 12.8% decline expected by economists in Reuters poll. This was followed by a negative growth of 1.4% in the March quarter.

Between April and May, New Zealand imposed a strict nationwide lockout for several weeks to slow the spread of the coronavirus. This meant that most people had to stay indoors and all non-essential businesses closed. Infection rate in the country About 5 million people With, is relatively low There were 1,809 cases and 25 deaths.

Robertson told CNBCSquawk Box AsiaThat activity was “expected” for the June quarter, with business reopening in July and August and people returning to work. At the moment, the virus seems to be relatively under control in the country.

“We’ve seen ourselves coming out relatively well and relatively quickly. So we’re expecting strong September quarter results,” he said.

Salary subsidy

To help traders deal with national lockouts without staff, the New Zealand government introduced a pay subsidy program that Robertson said protected 1.7 million jobs. The reports said More than NZ 13 13 billion ($ 8.81 billion) has been disbursed under the scheme.

The program is not expected to grow further until New Zealand is forced to close at a tougher level in the future.

Robertson told CNBC. “What we’re focusing on right now when our economy is operating relatively openly is supporting specific sectors where we’ve seen more exposure – for example, our tourism,” he told AFP. Inside the industry, “Robertson told CNBC. He explained that there are still plans in place to help people who have lost their jobs and to help small businesses with access to interest-free loans.

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New Zealand is New Zealand Preparing for next month’s election Which Could serve as another referendum Led by Prime Minister Jacinda Adern.

Future shocks

In it Pre-election economic and financial updatesThe New Zealand Treasury says net debt is expected to rise in the coming years, affecting the long-term recovery of the Pacific nation. At the end of June, net debt was projected to be 27.6% of GDP and by fiscal year 2024, it is expected to grow to 55.3% of GDP.

Robertson said New Zealand’s balance sheet is strong and its net debt will reach a record high. He explained that the coronavirus epidemic is a “one-in-100-year” shock to the global economy where all governments are looking for ways to finance their people and businesses.

“Once we’re all established, we obviously have to be very careful in our financial management,” he said. “We have found a way forward to control debt and bring it down over time.”

“But like all governments, I have to strike a balance that we continue to invest in our public services and health and education, which we especially need at such times. And to support the people through uncertainties.” Robertson added that the country would be able to absorb more shocks to the economy.

Air New Zealand

In August, New Zealand’s national carrier reported its first annual loss in almost two decades and Reports say it plans to repay NZ 900 900 million (59 6,596.34 million) in government debt. To prevent an epidemic, which has plagued the world of travel and tourism.

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Robertson said Air New Zealand remains an important part of the country’s economy and plays a key role in its economic growth. The government plans to work with the airline for its future position in the coming months.

“Like all the airlines around the world, they are facing a huge challenge at the moment. They are starting to pay attention to the debt that we have offered them to support them during this time.” “The government intends to be the majority stakeholder in the carrier,” he said, adding that the government has “a lot of unnecessary shortcomings” as it “adapts to the very small segment of passengers that they are dealing with”.

Muhammad

About the author: Muhammad

Wayne Ma is a reporter who covers everything from oil trading to China's biggest conglomerates and technology companies. Originally from Chicago, he is a graduate of New York University's business and economic reporting program.

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