New Zealand’s GDP fell by 12.2 percent in the June 2020 quarter, the largest quarterly fall on record, as the COVID-19 restrictions in place impacted economic activity, New Zealand’s statistics department Stats NZ said on Thursday.
“The 12.2-percent fall in quarterly GDP is by far the largest on record in New Zealand,” national accounts senior manager Paul Pascoe said in a statement.
New Zealand started the June quarter in Alert Level 4 lockdown, with strict restrictions on the activities of both households and businesses. On June 8, the country removed physical distancing requirements by moving to Alert Level 1.
“While level 4 restrictions were in place for most of April, the gradual return to level 1 over the course of the quarter meant that businesses were able to open up again and many people returned to places of work,” Pascoe said.
New Zealand’s border was closed to incoming international travelers on March 19 and remained closed throughout the June 2020 quarter.
Some industries were more affected than others by the border closure and alert levels restrictions in place during the June quarter, Pascoe said.
“Industries like retail, accommodation and restaurants, and transport saw significant declines in production because they were most directly affected by the international travel ban and strict nationwide lockdown,” he said.
“Other industries, like food and beverage manufacturing, were essential services and fell much less,” he added.
The majority of construction activity and some of the manufacturing sub industries were deemed non-essential and so temporarily shut under Alert Level 4. Construction declined by 25.8 percent, and manufacturing fell by 13 percent, statistics showed.
The fall in production was paralleled by declines in household spending, which fell 12.1 percent over the quarter. Expenditure on household services such as domestic and international air transport and restaurant and takeaway meals fell sharply. Exports of travel services declined, as international visitor spending fell after the border closed, according to Stats NZ.
Annually, New Zealand’s GDP fell by 2 percent, the first annual decline since the March 2010 quarter, statistics showed.
The country’s GDP per capita fell by 12.6 percent in the June 2020 quarter, it said.