‘Our GDP drop is far greater’

Saturday September 19, 2020 Written by Published in Economy
Mark Brown. 20031816 Mark Brown. 20031816

It won’t be until the end of this year that the level of the country’s economic decline is known, Deputy Prime Minister Mark Brown says. 

An air bridge between Cook Islands and New Zealand is going to be crucial to the Cook Island’s economy to allow income to start flowing back into the country again.

And while discussions about the arrangement for quarantine-free travel are still taking place between the two governments, Deputy Prime Minister Mark Brown says nothing will happen until after the second community outbreak in Auckland is contained and New Zealand general elections are over.

“New Zealand is aware of this and we are aware of this but we have to make sure we do it properly,” Brown said.

According to RNZ, official numbers in New Zealand released earlier this week, show gross domestic product (GDP) falling a seasonally adjusted 12.2 per cent for the three months to June. This shows the country is in their first recession in a decade.

It followed a revised 1.4 per cent fall in the first quarter and was the biggest drop since the current system of measuring data was introduced in 1987.

New Zealand’s Finance Minister Grant Robertson said the sharp decline was “no surprise” and economists had already moved on from the data, regarding it as “ancient history”.

Mark Brown wouldn’t be drawn to elaborate on what this means for Cook Islands other than saying: “Our GDP drop is far greater.”

“We don’t have the numbers right now but the September quarter at the end of this month should give us an indication of what level of drop there is in our GDP,” Brown said.

Initial estimates are that the country’s GDP would drop by half, which is significant, he said.

“The good news for our economy is that it is very nimble and should be able to bounce back fairly quickly,” he said.

“Without income coming into our country in the form of visitors coming through, we rely on other forms of income such as our fisheries revenue and our infrastructure projects which the government is funding that will take us through to the next couple of years.

“These are the forms of economic activity that will keep our economy ticking over but at a reduced rate.”

According to the Asian Development Bank, Cook Islands’ economy will contract by 15.4 per cent by this financial year which concludes in June 2021.

 

1 comment

  • Comment Link Robert Saturday, 19 September 2020 10:06 posted by Robert

    No air bridge until after the NZ election, why? also why not open the border now to NZ citizens now who are coming long term and prepared to do the prerequisite negative test and quarantine in the Cooks i.e. treat them the same as the returnees, at least you're get some activity occurring with no more risk than the current returnees

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