WELLINGTON (Reuters) – New Zealand is set to record its sharpest quarterly contraction and officially enter recession when it releases second quarter economic data this week, reflecting the full impact of coronavirus lockdowns on business.
The median forecast of economists polled by Reuters showed GDP shrinking 12.8% quarter-on-quarter in the three months to June, following a 1.6% decline in the previous quarter.
That would put New Zealand in its first technical recession, defined as two straight quarters of contraction, since 2010, although an easing in coronavirus curbs has aided a quick recovery. GDP is expect to fall 13.3% year-on-year.
Prime Minister Jacinda Ardern’s government, which faces an election on Oct. 17, has said there will be “large drop” in activity in the June quarter, but that success in suppressing the virus locally is likely to help recovery prospects.
New Zealand was the only country to stay free of COVID-19 for