GETTING TO GRIPS WITH COVID-19
There’s no escaping it: we are living in worrying times, times that are out of our control. As the Covid-19 outbreak spreads like wildfire, official pandemic responses – such as travel bans and isolation measures - are coming thick and fast. And, as those measures take hold, both in New Zealand and overseas, the economic repercussions are also increasing and becoming more severe.
Certain industries, notably air travel, tourism and hospitality, are already suffering and economists across the board say that we are now in recession territory and will see a significant economic downturn. There’s already a trickle of reports of job losses and business failures, and that trickle is only going to grow.
It’s scary stuff, made more so by the prevalence of catastrophic predictions. But authorities are acting to try and quell the economic fallout.
On March 16, the Reserve Bank slashed the OCR by 75 basis points to a new record low of 0.25% to provide monetary stimulus to the economy. It also announced that it would delay the introduction of new capital requirement rules for the banking sector by one year to support credit availability.
The next day, the Coalition Government announced a $12.1 billion economic package in a bid to cushion New Zealanders’ jobs and the domestic economy from the virus. It is worth 4% of GDP and is a larger plan than that implemented in response to the Global Financial Crisis.
But the future remains
