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Facing a changed world By Sue Newman
sue.n@theguardian.co.nz
The fallout from the Covid-19 lockdown will be approaching the economic chaos that followed the great depression of the 1930s, economist Brad Olsen says. The Infometrics senior economist spoke with Ashburton District councillors yesterday and said the impact of the lockdown would be felt for at least the next 18 months.
“There will be significant shocks to the economy and the next few months will be quite hard. New Zealand will be in a state of flexibility and flux for the next few years and it’s about finding new ways to operate in the lull,” he said. He expects unemployment to hit 10 per cent, close to the level it reached during the late 80s and early 90s, but significantly higher than the figure of 6.7 per cent dur-
ing the global financial crisis. The government’s wage subsidy would help businesses and save jobs in the short term, but longer term there would inevitably be job losses, Olsen said. Even in a district such as Ashburton with a primary industry base, it was likely to be more than three years before the economy was at the same level it was before Covid-19, he said.
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The economic hit would be broad-based across the district, Olsen said, but there would be sectors such as tourism that would be incredibly hard hit. While domestic tourism had been Ashburton’s bigger sector, the loss of international tourists would still carve $64 million out of the economy, he said. “There is significant strength in the local economy. Ashburton
is in a better position than other regions economically to weather this storm but everyone needs to be aware that once we come out of lockdown, life won’t just spring back to normal. It will be a very different economic landscape.”
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