The Treasury today has published seven different scenarios on the possible economic impacts of COVID-19. It has also started weekly publication of an expanded Weekly Economic Update, which will be accompanied by a new COVID-19 Economic Dashboard each Friday.
Secretary to the Treasury Dr Caralee McLiesh said the seven scenarios are based on a range of times spent at different alert levels, the impact on economic activity at each alert level, and the degree of fiscal support.
“The assumptions behind the scenarios have been informed by discussions with the All-of-Government officials and the previously released public health modelling of the course of the virus.
“There are a wide range of possible impacts depending on which scenarios you look at. Annual average GDP growth is shown to fall by as little as 0.5 percent or as much as 23.5 percent in the fiscal year ending 30 June 2021, and estimates of the unemployment rate in the June 2021 quarter range from 5.5 percent to 22 percent. Two of the scenarios illustrate the cushioning effect of greater fiscal support on GDP and unemployment.
“I must emphasise that these are indicative scenarios, based on assumptions and estimates subject to considerable uncertainty. They are not official Treasury forecasts or the Treasury’s view of what will happen.
“What they do provide is insight into some of the possibilities that the Government and officials will consider as we develop responses to COVID-19 and plan for a solid economic recovery.
“Actual outcomes will depend on a range of factors, including the success of containment measures and the economic response, both in New Zealand and internationally.”
Caralee McLiesh said the Treasury will also publish up-to-date economic information and commentary every week.
“We know there is a strong demand and need for more frequent economic information and more transparency of economic analysis. To better meet that need, today we have published our latest Weekly Economic Update with additional focus on key high frequency indicators that can help inform the current economic situation. A new update will be published every week, starting this Friday.”
Treasury Chief Economic Adviser Tim Ng said, “From this Friday we are also providing a weekly COVID-19 Economic Dashboard. The new dashboard will contain a range of real-time data designed to aid independent analysis and give businesses a sense of the activity across different parts of the economy.”
The Treasury website now has a COVID-19 Economic Response page that brings together links to all of the Treasury’s COVID-19 related economic reporting, analysis and data: https://treasury.govt.nz/covid-19
Links to the economic scenarios and latest versions of the Monthly Economic Indicators, Weekly Economic Update and (from Friday 17 April) COVID-19 Economic Dashboard are available there.