New Zealand’s economy shrank in the last quarter of 2020 as a border closure to help contain the pandemic deprived businesses of a summer influx of foreign tourists, offsetting a housing boom sparked by record low interest rates.

Statistics New Zealand said gross domestic product dropped 1.0% from third quarter. The outcome was worse than expected, but expectations had varied widely following a record contraction in the second quarter and a frenetic bounce back in the third quarter.

The impact of the pandemic was more apparent in annual figures, with the economy 2.9% smaller in 2020 than it was in 2019.

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