New Zealand’s road to economic recovery is only just starting, according to ASB.
The bank this morning released its quarterly economic forecast, and says the country’s fast response to Covid-19 means it could be in a better position to return to normality sooner than other countries.
But, Nick Tuffley, ASB's chief economist, has also warned that normality may still be a way away.
“Economically, we see the country as going through three stages: surviving the crisis, adapting in a period of transition, reimagining itself into the new normal,” says Tuffley.
“The crisis period is where we are now: surviving the impacts of the lockdown and reopening when ongoing restrictions, behavioural changes, and potential for spending caution mean revenue streams are highly uncertain.”
He says it has been and “will continue to be” a time of swiftly making hard decisions.
According to ASB’s forecast, the country’s transition period could take 12 to 18 months, with a number of uncertainties likely to be resolved during this time.
Mr Tuffley says persistent and permanent shifts in behaviour will become more apparent, and this will be a period in which being adaptable and flexible will be important.
He says the country will “reimagine” itself .
“Supply chains are likely to focus more on reliability and resilience, favouring local sources more, even if at higher cost.
“Finally, New Zealand will reimagine itself in what will become the ‘new’ normal.”
At midday today, the country's social gathering limit lifts to 100 from 10, in a bid to get the economy moving.
Weddings, community sports, funerals and tangi, church services and other gatherings can all have 100 people in attendance provided they are all seated.
Prime Minister Jacinda Ardern announced the limit change on Monday, and said she wanted “to get our economy moving quickly without losing the gains".