Jacinda Ardern has turned New Zealand and its economy into a tailspin

[ad_1]

According to industry experts, tourism, which New Zealand depends on, is not expected to rebound for several years. Such strict border controls have prevented workers from entering or returning to the country, creating labor shortages and making reopening more difficult.

The pain is expected to continue: Despite better-than-expected growth by the end of last year, the country is poised to head into a recession this year, with government treasury projecting contractions in the second, third and fourth quarters of the year.

Of course, New Zealand isn’t the only country dealing with the looming threat of a recession. Much of what the country is experiencing reflects global trends: recession, crippling inflation, a faltering housing market, and rising interest rates.

But levels of optimism vary widely between countries, despite facing similar economic challenges. Take business reports from both the UK and New Zealand this week.

Not only did the UK rank in the top three countries for investment; British business chiefs show higher levels of confidence than their foreign counterparts, with 48 per cent reporting they are optimistic about their returns this year, compared with more than 40 per cent of CEOs worldwide.

Compare that to the news this week from New Zealand, where business confidence is at a 50-year low. The Institute for Economic Research reported through its annual survey of businesses that 73% of companies expect conditions to deteriorate over the next year, while costs will increase for more than 80% of companies, which increases the possibility of layoffs and curtailed investment.

The problem for Ardern is that such concerns are not new: business confidence has been a longstanding problem in New Zealand since she took office.

Labor policies, from raising the minimum wage to opposing foreign home ownership, were on the list of business concerns years before the pandemic.

Ardern’s handling of the pandemic and the country’s struggle to reopen have exacerbated those problems, pushing companies from skeptical attitudes to deeply pessimistic forecasts.

The bleak outlook for New Zealand’s economy has been reflected in opinion polls for some time, with its personal and party polls on a downward trajectory. The centre-right National Party has proven competitive in the polls since the spring of last year and is now several percentage points ahead of Labor, less than a year after the next election.

[ad_2]