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We’re shaken, but far from stirred By Sue Newman
sue.n@theguardian.co.nz
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The Ashburton District’s economy might have been shaken by Covid-19 but compared to many parts of New Zealand, it’s still in reasonably good health, says economist Brad Olsen. Speaking in Ashburton on Thursday, the Infometrics economist gave business leaders a warts and all look at how the district was faring today and how it was likely to fare in the months ahead once the last of the government’s financial support packages had run their course. New Zealand was living through the greatest economic shock for many decades, Olsen said, and while the recovery in the short term were better than anticipated it would be 18 months before the full effects of border closures, business failures and job losses were felt.
“The country’s in an odd state, a wait and see phase. Compared to pre-pandemic things are still not quite as great across the country and there’s still a lot of uncertainty. When the government’s sugar money ends the economy will slow and there will be more sobering expectations. This won’t be a fast recovery and it’ll take one-and-a-half years to make it back to a normal level of the economy,” he said. The wage subsidy had simply delayed job losses and that was likely to kick unemployment rates up to above 8 per cent by the end of the year, with a peak of 9.7 per cent likely next year. Since the level four lockdown, 63,000 jobs had been lost and it was likely another 20,000 would be added to that in a second wave, post the wage subsidy, Olsen said. “And while people might still have
jobs, the amount of money in their back pocket is less.” While the Ashburton District’s strong primary sector meant it was likely to avoid the worst of the national pain, it would not emerge unscathed and the latest unemployment data very clearly showed that, he said. “We’ve seen an incredible shock to the economy and a significant down turn and we’ll see some hard times, but we have to keep working on what a different economy looks like. If you want your economy to keeping moving you need to protect your primary sector. Confidence is easy to lose and hard to gain back.”
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