New Zealand stock prices have fallen sharply as the world continues to brace against the spread of the coronavirus Covid-19 outbreak - but tourism and drought losses could also have a negative effect here.
Investors are growing increasingly concerned about a global economic slowdown as the outbreak spreads outside of China.
Asian and European markets ended lower with US stocks tumbling to an 11-week low, and the fallout from the virus saw about $1.5 billion wiped off the NZX yesterday.
ASB chief economist Nick Tuffley, however, this morning told TVNZ1's Breakfast programme that investors should remember that volatility is a reality in any market.
"People do need to make sure they're focusing on the longer term as well," Mr Tuffley said.
"It's very hard to time markets - while you can try and time the right time to get out, it's hard to time the right place to get back in.
"It's a good time to take that view that volatility will be here and to focus on long-term goals."
Meanwhile, the New Zealand Government has set up an advisory board to deal with the impact of the virus on our tourism sector, with the industry suffering since travel restrictions between China and New Zealand were imposed in early February.
David Gatward-Fergusson of Nomad Safaris has put together a “see you soon” video in Mandarin.
Tourism Minister Kelvin Davis said alternative markets are now being targeted.
"Well, the key markets are really North America and Australia," he said.
"Those markets are still open, people are still visiting us from there, and so we're looking to capitalise on that."
The Government has said it doesn't yet know the full financial impact of the virus on New Zealand's tourism sector, but warns it will be significant.
Tourism Aotearoa’s Chris Roberts says it’s going to be a tough year for the sector.
Air New Zealand said on Monday that it is preparing for a drop in projected earnings of up to $75 million in the 2020 financial year.
A prolonged dry period could also add to the economic downturn in coming months, with Northland particularly affected by dry conditions over the past 14 months.
The New Zealand Defence Force has now been called in to deliver water via tankers in the region as home and commercial tanks run dry.
In Northland, which is unusually dry, the army is now stepping up to help.
Local iwi have also become involved in efforts to deliver water to those most in need.
No rain is being forecast in Northland until at least next month.
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