Kiwi economist warns New Zealand lockdowns may bring worse recession than Australia

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A senior Westpac economist said, New Zealand's Covid-19 lockdowns may cause a deeper recession than Australia. The warning comes as New Zealand face an economic downturn even more severe than the early part of the 1930s Great Depression. Auckland-based Michael Gordon, a senior economist at Westpac, says the bank is expecting next week's official figures to show an 11.5 per cent contraction for the June quarter a level more severe than Australia's record 7 per cent drop during the same period.

New Zealand's gross domestic product fell by 1.6 per cent in the March quarter as Australia's economy shrunk by only 0.3 per cent despite the devastating summer bushfires. In 1932, at the height of the Great Depression, the Kiwi economy plunged by seven per cent in one year. If recovery does not materialise in the September and December quarters, New Zealand could suffer an even worse downturn than 88 years ago.

Westpac's Gordon told Daily Mail Australia that New Zealand's alert level 4 lockdown had effectively closed down one third of the economy in April. The Covid-19 lockdown was one of the most extraordinary events in New Zealand's economic history. Such a massive change inevitably comes with a wide margin of uncertainty.