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OECD Says New Zealand Economy Hit Harder Than Most

New figures show New Zealand is likely to experience a bigger economic shock from Covid-19 than Australia and other OECD countries despite being in a better position than most to manage the crisis, National’s Finance Spokesperson Paul Goldsmith says.

“The OECD estimates that New Zealand’s GDP will fall by 8.9 per cent this year, worse than the OECD average of 7.5 per cent.

“New Zealand had huge advantages in terms of isolation, distance and small population, yet our extremely heavy lockdown has resulted in a worse economic outcome than most.

“Finance Minister Grant Robertson has spent the last 18 months telling us that New Zealand is doing so much better relative to the OECD, yet we’re now lagging behind at the first test.

“Two thirds of OECD countries expected to fare better economically than New Zealand. Australia and South Korea are only expected to contract by 5 per cent and 1.2 per cent this year respectively.

“Australia, for example, managed to keep industries like construction operating throughout the lockdown and as a result they will have a smaller economic impact and lower unemployment.

“New Zealand’s unemployment rate is expected to rise by 3.8 per compared to just 2.2 per cent in Australia. This highlights that while New Zealand has managed the health response to Covid-19 successfully, the economic response has been poor.

“The Government urgently needs to put forward comprehensive economic plan to reduce the damage and remove barriers to private sector growth, open the borders safely and start work on high quality infrastructure projects.

“So far the Government’s only plan has been massive amounts of debt-fuelled spending, with no plan for economic growth or how to keep debt manageable.”

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