Answer to Question #199217 in Macroeconomics for Anisha Kumar

Question

In no more than 250 words, explain the impact of COVID19 crisis on the economy of New Zealand. Discuss specifically its impact on GDP, trade, inflation, employment and business activity. Supplement with the relevant national statistics, where possible.

Answer 1

The Covid 19 crisis has influenced the economic activities like in New Zealand.

The New Zealand GDP has declined by 12% at the end of 2020 because the demand for the export has declined. It has also slowed down the trade by disrupting the supply chains, tourism flows and pressuring economic growth. Inflation has increased by 1.4 %in 2020 whereby the cost of goods has increased. This is caused by demand-pull, cost push and money supply inflation. The lock down in the country to contain Covid 19 pandemic has led to high unemployment rate since most industries have reduced the number of employees because of increased losses incurred. The crisis has also disrupted business activities where most business are incurring losses because of the lock down.