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New Zealand
This Week in AsiaEconomics

How will New Zealand’s economic slump play out for jobs – and October’s general election?

  • Ordinary New Zealanders are struggling to pay the bills as the economy stagnates and interest rates are at their highest in years
  • Some economists predict that worse is yet to come – with national polls just weeks away, and a ruling Labour Party that’s haemorrhaging support

Reading Time:5 minutes
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Auckland, New Zealand. The nation’s economy is predicted to struggle further in the coming months. Photo: Bloomberg
Su-Lin Tanin Singapore
After six months, New Zealand’s economic woes may have ebbed, but it’s not out of the woods yet.
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It became the first Asia-Pacific nation to slip into a recession after its economic output retreated for two successive quarters from the tail end of last year. Government statistics released on Thursday show the economy started growing again in June, but only by a miserly 0.9 per cent.

And those weak figures are unlikely to vastly improve any time soon, economists say, given the looming economic downturn that the world is facing. Such a gloomy prognosis could now colour national debate ahead of the country’s October 14 election.
Chris Hipkins was sworn in as New Zealand’s prime minister in January, after his predecessor Jacinda Ardern stepped down. Photo: dpa
Chris Hipkins was sworn in as New Zealand’s prime minister in January, after his predecessor Jacinda Ardern stepped down. Photo: dpa
Amid public disquiet about rising prices, the ruling Labour Party – in power since 2017 and led by Jacinda Ardern until she stepped down in January – has been facing declining polling numbers. A 1News Verian poll released on Wednesday showed the ruling party with 27 per cent support, compared with 37 per cent for the main opposition National Party.

New Zealand and neighbouring Australia have been battling fast-rising inflation in recent months, fuelled by stricken supply chains and shortages caused by a war half a world away in Europe.

Wellington has responded to rising prices that are more pronounced than in other Asia-Pacific countries such as Indonesia or Singapore with aggressive interest rate increases, which have delivered hard blows to consumer spending and the economy.

A July survey of 1,000 people by independent research body Research New Zealand found that 33 per cent of respondents were going without medical care because of cost concerns, while 32 per cent struggled to pay for transport and 32 per cent had difficulties settling their utility bills.

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