XE Data Update - NZ Treasury Releases Economic Scenarios For Lockdown
The New Zealand Treasury released its economic scenarios for lockdown. The key points are:
- The pandemic is a ‘once in a century’ public health shock having a profound impact on economic and financial systems around the world and in New Zealand.
- There is a high level of uncertainty on the path the NZ economy will take.
- All scenarios begin with a deep contraction in activity in the June quarter
- When the public health risks diminish, and containment measure here and internationally de-escalate, the global and domestic economy will begin to recover, supported by large fiscal packages and the significant easing in monetary policy -timing and pace of recover is unclear.
- NZ GDP to fall at least 13% in year to March 2021 and could fall as much as 33%
- Peaks in the unemployment rate will be around 13% if the lockdown remains at 4 weeks
- If lockdown extended the unemployment rate could reach between 17.5 to 26%
- If lockdown stays at 4 weeks, and the Government provides extra support for businesses, the unemployment rate can stay below 10% and return to 5% by 2021
- Forecast show the NZ economy can bounce back to be NZD$70 billion larger by 2024 than in 2019.
- World outlook is also highly uncertain
NZD little changed in immediate response
Current indicative levels are:
NZD-USD 0.6070 / 0.6095
NZD-AUD 0.9535 / 0.9560
NZD-EUR 0.5565 / 0.5590
NZD-GBP 0.4955 / 0.4980
NZD-JPY 65.50 / 65.75
Please call for further information or pricing.
Below is the link to the complete Treasury report: