COVID-19 and the subsequent lockdown by many countries led to the global supply chain being an "absolute mess", and it could take up to six months for it to start operating again, a Kiwi economist warns.
Chief economist Cameron Bagrie of Bagrie Economics says lockdowns have caused a "pretty big" disruption since there was less spending and producing of goods.
"When you send everyone home - and this has not just happened in New Zealand, it happened around the globe and it started in China - people are not spending at home, but they're also not producing," he told Magic Talk.
"And then all of a sudden when we go down to various lockdown stages, the global economy's now starting to open up, we've got a little bit of pent-up demand and people are starting to rush out there to get a haircut and all those sorts of things."
He adds although people want to purchase goods they needed during lockdown, sometimes they're nowhere to be found.
"They're looking at 'where are the items', well there are no items because the global supply chain is an absolute mess at the moment. Things have been shut down.
"It's going to take three to six months to really get that back online. And of course, big parts of the global economy at the moment are still not fully operational either."
These "big parts" include international borders being shut, which counts for roughly five percent of the economy.
He says New Zealand is heavily reliant on exports and imports, and for items that used to arrive via air travel the prices of these are now "through the roof" since they're in short supply and are coming via sea.
A big theme happening globally is people are looking at the globalisation of supply chains, he says. This is where the realities of COVID-19 are starting to show when sourcing medical items and people are starting to wonder if globalisation is essential for this.
"We're also starting to see globally people are starting to have a pretty big home bias in regard to bringing it back onshore as opposed to being offshore. Now the challenge in regard to that is that it might give you security of supply, but is it going to be as cheap and are people going to be prepared to pay?"
Bagrie says even though there'll be more of a "national bias" in the post-COVID-19 recovery, he's warning against a complete global import exclusion which could lead to an "absolute economic disaster".
"It's self-interest trumping group interest, because it's sort of like every country's out there for themselves. They're thinking about their own priorities, to look after their own citizens, and you can understand a lot of the reasoning behind this.
"We are starting to dial back the clock a little bit, and I hope it's a little bit as opposed to a lot."
