2020 has been a challenging year for virtually all of the world’s major economies. How has New Zealand reacted to the current global financial slump, and what can people do to help the gross domestic product (GDP) to improve?
An Overview of the New Zealand GDP
The economy here is just outside the world’s top 50 in terms of GDP. It largely depends upon several crucial sectors, with tourism, agriculture, and retail the three main elements. New Zealand has strong economic links with many countries, among them Australia, China, the USA, and Japan. The service sector is important here, while agriculture makes up close to two-thirds of all exported goods. As for tourism, the huge appeal of the country for adventurous tourists helped this area account for close 6% of the national GDP, and 188,00 full-time jobs, in the data up to 2019.
However, the latest reports suggest that the quarter to June 2020 will reflect the biggest GDP decline since records began. It has been predicted that the fiscal year to March 2021 will show a 7.2% contraction in the economy, as the full effects of the current crisis hit home.
What Can Be Done to Help?
The sharp decline in the New Zealand GDP is similar to figures that have been reported in other economies all over the world. However, New Zealand seems to be in a stronger position than many other countries as we turn to our attention to a recovery strategy.
Other countries have suffered a far more dramatic decline, causing many companies to close down and millions of jobs to be lost. In New Zealand, one of the biggest risks is that with international trade limited the 2020 harvest of different fruits could be disastrous, with $9.5 billion and 20,00 seasonal workers at risk.
One option to help support the national economy is to invest in local businesses through the stock markets. The NZX index has gone through a turbulent period, so investors may find the opportunity of making a profit while supporting local businesses. You can follow the markets with the help of a trading site like eToro, where it is possible to follow the value of the major companies or to carry out CFD trading that doesn’t involve the actual asset being purchased. By monitoring this market you will have a better understanding of the health of the economy, highlighting what you can do to help or invest.
The important factor now appears to be the need for residents to support local businesses as much as possible. Shopping locally and buying nationally-produced items is an approach that can help to kick-start the economy’s recovery. The #shopkiwi campaign was launched back in April, giving consumers an easier way to find the businesses they need more easily. Consumer confidence is lower than at any time since the 2008 crisis, though.
It is worth noting that the lockdown period appears to have brought in a new way of shopping, with more people than ever before turning to online commerce. A reported 78% of New Zealanders shopped online in June this year, with almost the same amount planning to carry on doing so in the future.
A Look Ahead
It is clear that the rest of 2020 will be a difficult period for the New Zealand economy. However, the stimulus measures taken by the government, and the willingness of the population to return to normality should help the recovery to begin as soon as possible.