It could be 2024 before some parts of the economy fully recover – economist

By Jessica Tyson

Māori economist Dr Matthew Roskruge says it could reach 2024 before some parts of the New Zealand economy fully recover, especially tourism.

Roskruge, of Te Ātiawa and Ngāti Tama is an economist at Massey University. He says there is a consensus that in 2021 or early 2022 the economy should be starting to look more normal.

“But it could be 2024 before some parts of the economy are back to where they were hoping to be, maybe tourism for example.”

Auckland lockdown

According to a report by Dot Loves Data the Auckland lockdown is losing 250 jobs and up to $75 million a day in economic activity during the current Alert Level 3 lockdown.

Roskruge says while the lockdown has been a big whack to the economy, it’s not so much of a concern yet for all New Zealand. Instead, he is worried that the lockdown has affected the confidence of people.

“After the first lockdown, New Zealanders thought that we were getting through the coronavirus. It was okay to start spending, to start interacting in the economy, to start going to restaurants again and this level three lockdown in Auckland has really shaken people’s confidence in how the rest of the coronavirus pandemic is going to play out,” he says.

He says economies run on positivity and people willing to invest and take risks.

“We might be a little bit more reluctant. We want to save and that has a bigger impact and a long impact.

Businesses

Roskruge says businesses in entertainment, tourism and hospitality will more likely be affected. However, businesses closing could also create opportunities for new businesses to start.

“Once things start to improve, so again it’s moving away from the real tragedy for individuals and their whānau, but there are some opportunities once we move into a recovery phase for new businesses to be created.”

Roskruge says while Auckland will come out of the lockdown on Monday, August 31, the lack of confidence could continue for quite a few months yet.