Jacinda Ardern is paying the price for her hermit zero-Covid economy – The Telegraph

The latest data out of New Zealand is simply dreadful. Last week, its central bank forecast that the economy would go into a steep downturn next year after survey results showed business confidence was slumping at alarming rates.

House prices are falling at the steepest rate for 13 years, and that may well accelerate. Inflation is touching 7pc, a 30-year high. The central bank is pushing interest rates higher more aggressively than anywhere else in the developed world, with a half point increase in May marking the fifth straight rise, along with signals that there are a lot more to come before it is finished.

Its neighbour Australia might have had lockdowns that were just as strict, but at least Canberra now has booming commodity exports - Australia is stepping into a lot of the markets that Ukraine has had to abandon - to help it through 2022. New Zealand is facing a global slowdown and an inflationary storm on its own.

New Zealand is experiencing the after-shocks of Arderns fanatical pursuit of zero-Covid. You cant seal off an economy, close down its tourism sector, and spend huge sums of money on support for all the businesses that have been closed, without expecting the economy to suffer. That is now becoming painfully clear.

Tourism was the countrys largest single export, for example, ahead of dairy products, but it was crushed by the quarantine rules and is expected to take another three years to recover to pre-Covid levels. A third of the workforce was laid off during the pandemic, and are yet to be fully re-hired.

Despite its fantastic scenery, television and film production companies started to abandon the country, most notably when Amazon cancelled filming there for its Lord of the Rings series, the most expensive TV show in history.

Read the original here:

Jacinda Ardern is paying the price for her hermit zero-Covid economy - The Telegraph