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| Re: Aotearoa—No New Cases Day 3?—Queen Jacinda Causes Recession (1769223) | |||
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Re: Aotearoa—No New Cases Day 3?—Queen Jacinda Causes Recession |
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Posted by Stephen Bauman on Thu Sep 17 09:13:09 2020, in response to Re: Aotearoa—No New Cases Day 3?—Queen Jacinda Causes Recession, posted by Olog-hai on Thu Sep 17 02:38:30 2020. The 12.2 percent contraction in April-June was "by far the largest" since records began, national data agency Stats NZ said, with the country put into a strict lockdown for almost two months and the country's borders closed...She said New Zealand "compares very unfavorably" with neighboring Australia, which recorded an economic contraction of seven percent in the June quarter after adopting a more flexible approach to lockdowns and border controls.So, they are comparing New Zealand's 12% vs. Austrailia's 7% GDP declines. Let's examine this a bit further. There would have been a GDP decline in Austrailia and New Zealand even had they not suffered a single Covid case nor had any lockdown. This is because the rest of the world is suffering from Covid, the rest of the world is in lockdown, and their GDP's and spending has tanked. That spending is for domestic goods and services, as well as imports. Their reduced spending on imports would affect the exports of Austrailia and New Zealand. What's the GDP percentage of exports for Austrailia and New Zealand? It's 24% for Austrailia and 28% for New Zealand. One should expect a greater percentage GDP decline for New Zealand, even if neither country had a single Covid case. This difference must be factored into any comparison between Austrailia and New Zealand for determining the effect of lockdown policies on their domestic economies. Let's assume the percentage declines were the same percentage between domestic and export goods. Then Austrailia's domestic decline due to its lockdown policies was 7*(1-0.24) or 5.3%. New Zealand's was 12.2*(1-0.28) or 8.7%. By comparison, the US GDP includes only 11.7% exports and suffered a 9.5% GDP quarterly decline. This translates to an 8.4% decline due to domestic policies. That's the same as New Zealand's figure. There has been very little difference between New Zealand, Austrailia, and the US in the GDP decline due to domestic lockdown policies. There has been a big difference in controlling Covid. New Zealand eradicated Covid for 100 days. It then demonstrated it could contain Covid within the community within 30 days. The US is waiting for a vaccine to achieve New Zealand's results. |
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