On Thursday Statistics NZ revealed New Zealand's Gross Domestic Product (GDP) had fallen by 12.2 percent during the June 2020 quarter.
It was a record drop for New Zealand's GDP, an indicator of how the economy is performing, and it pushed the country into recession.
In April, the beginning of the June quarter, New Zealand was already at alert level 4 until it decreased to level 3 on April 27.
The country continued to move down alert levels until New Zealand reached alert level 1 on June 8, when there were no active cases in the community.
During this time many countries around the world also locked down and shut businesses in an attempt to prevent the virus from spreading.
Over the past month many countries have announced their latest GDP figures which provide a snapshot of the value added to the economy during the June quarter.
New Zealand's GDP was negative for a second consecutive quarter and the country is officially now in recession.
Government books from September revealed COVID-19 cost the country $58.1 billion.
Treasury is predicting unemployment to reach 7.8 percent in the next two years representing more than 100,000 Kiwis losing their jobs.
They also predict house prices will fall a little to 5.1 percent until June next year - but then they are expected to pick up to pre-COVID-19 levels.
Other countries around the world who also took steps to contain COVID-19 have also recorded historically large drops.
So how does New Zealand's drop in GDP compare with Australia, the United Kingdom, Sweden and the United States?
Australia
In September the Australian Bureau of Statistics (ABS) announced the country had recorded a 7 percent fall in GDP during the June quarter.
This followed a 0.3 percent quarterly fall in the January - March quarter, which means the country has now entered a recession.
Before the COVID-19 pandemic, Australia was already managing the severe bushfire season. Moody's Analytics told The Guardian in January the economic damage from the fires was expected to exceed the record $4.4 billion set by 2009's Black Saturday blazes.
As well as the fires, economists were also saying that Australia was "teetering on the edge of a recession" at the end of 2019 due to a significant slowdown in economic growth.
On January 25th the Australian Government recorded the country's first case of COVID-19 in Victoria. The patient, a man from Wuhan, flew to Melbourne from Guandong on January 19.
In March the Australian government set aside $130 billion towards wage subsidies for up to 6 million workers to save further job losses.
Prime Minister Scott Morrison described the measure as an "economic lifeline" at a time when the nation was fighting twin battles "against a virus and against the economic ruin that it can threaten", the Guardian reported.
The programme was only supposed to last six months but as COVID-19 cases surged in July as part of the Victoria outbreak, the government injected a further $1.5 billion into the subsidy scheme.
In his July update to Parliament, Treasurer Josh Frydenberg said the Government was providing "economic support for workers, households and businesses of around $289 billion".
As a result, the 2020-21 budget will record an AU$184 billion deficit in the 12 months through June 30, 2021.
"These deficits reveal the real cost to the budget of protecting lives and livelihoods from the coronavirus," Frydenberg said.
Unemployment also hit 7.5 percent in July but fell to 6.8 percent in August with 111,000 jobs created.
United Kingdom
On August 12 it was announced the United Kingdom's GDP has fallen by 20.4 percent, more than any other major nation during the coronavirus outbreak in the June quarter.
This came after a decline of 2.2 percent in the first quarter.
The Guardian reported there are a number of reasons why the United Kingdom's performance was so much worse than other G7 countries including: the timing of the country's lockdown, school closures where parents had to stay home to look after children, and stringency with lockdown restrictions in place for longer than other countries.
Europe was one of the first places where COVID-19 broke out after the initial outbreak in China.
In an effort to support the economy the Bank of England cut interest rates from 0.25 percent to 0.1 percent on March 19 to the lowest ever in the Bank's 325-year history, BBC reported.
The Chancellor of the Exchequer also announced the government would spend £350 billion to bolster the economy, before the country shut down non-essential business and travel in late March.
In the fortnight to May 4, the Guardian reported nearly a quarter of all employees in Britain had been furloughed.
A total of 6.3 million jobs had been temporarily laid off by 800,000 companies as businesses flocked to claim the job subsidy scheme. Claims amounted to $8 billion by May 3.
Sweden
In the June quarter Sweden's GDP fell 8.6 percent, which is its largest drop in modern history.
The fall was significantly worse than the fourth quarter of 2008 during the global financial crisis where it recorded a fall of 3.8 percent.
The country's GDP also fell more than its neighbours which implemented lockdowns to stop the spread of COVID-19.
Economist David Oxley told CNBC that Sweden's sharp GDP contraction "confirms that it has not been immune to COVID, despite the government's well-documented light-touch lockdown".
"Nonetheless, the economic crunch over the first half of the year was in a different league entirely to the horror shows in southern Europe," he added.
Sweden was one country which decided to take a herd immunity approach to COVID-19 rather than prevention. Businesses and schools remained open and residents were able to live with limited restrictions.
To date, the country has recorded over 87,000 cases of COVID-19 and recorded 5800 deaths.
Unemployment in Sweden rose from 7.0 percent to 9.1 percent in one year according to the Swedish Public Employment Service.
At the end of August, the number of registered unemployed at the service was 475,000.
United States
On May 8 the Bureau of Labour Statistics reported the official unemployment figure of 14.7 percent, which was the highest level since the Great Depression.
The pandemic also saw a large transfer of wealth to the ultra-wealthy, economic analyst Jim Cramer claimed in June. He said it was the biggest transfer in modern history.
The United States' GDP fell 9.1 percent in the second quarter of 2020.
In March the Trump administration announced a $2 trillion economic relief package which was passed by Congress with "overwhelming" support.
This included assistance for workers, small businesses, preserving jobs and assistance for local governments.
When coronavirus took off in the United States about 16 million jobs were lost in the three weeks ending April 4.
The Guardian reported economists had expected 5.25 million Americans to file for unemployment benefits for the week.
As a result of losing their jobs, 5.4 million Americans lost their health insurance from February to May 2020.
During March and April, US consumers cut spending by the most on record while boosting savings.
Reuters reported the growing frugality reinforced expectations the economy would take years to recover from the COVID-19 pandemic.
How did New Zealand do?
Professor Ilan Noy, chair in the Economics of Disasters and Climate Change at the Victoria University of Wellington said New Zealand's GDP fall of 12.2 percent was expected.
"This is not really news to anyone; practically every country around the world (maybe with the exception of China) has experienced a deep recession in Q2 2020. The news is the amount of decline (for us 12 percent)."
Head of the school of economics and finance at Massey University professor Martin Berka agreed.
"The fall in GDP is within the range of economic forecasts and reflects, amongst other things, the strength of New Zealand’s economic restrictions during level 4 and 3 lockdowns that lasted much of the second quarter.
"Although the relationship between economic cost and COVID-19 outcomes is nonlinear (having no restrictions and having maximum restrictions both achieve negative economic outcomes), New Zealand clearly opted to go for the more hardline approach regarding COVID-19 health outcomes, and on the margin, this resulted in worse economic outcomes relative to similarly-well-organized countries that chose a lesser degree of economic restrictions (such as Germany, South Korea, the Netherlands, Taiwan, etc.)."
He said ultimately the decision for New Zealand to go into lockdown was a societal choice made by the Government.
Prof Noy said New Zealand now needs to look towards the future and recovery.
"The important question is the recovery in Q3, and I think that we are well placed to see a stronger recovery in Q3 than elsewhere. So, this should not be a gloom and doom story, but rather one that points out that what happens next is what matters.
"Since this is a self-imposed recession, and we have done many of the right things to keep the economy on a lifeline during lockdown, the questions that should be asked are around whether we are doing the right things to recover in Q3 (and Q4, since Q3 is almost over already).”
Other notable changes for countries GDP for the second quarter of 2020 according to OECO Stats include:
- Austria -10.7 percent
- Belgium -12.1 percent (provisional)
- Canada -11.5 percent
- Chile -13.2 percent
- Columbia - 14.9 percent
- The Czech Republic -8.7 percent
- Denmark -6.9 percent
- Estonia -5.6 percent
- Finland -4.5 percent
- France -13.8 percent
- Germany -9.7 percent (provisional)
- Greece -14 percent (provisional)
- Hungary -14.5
- Iceland -9.1 percent
- Japan -7.9 percent
- Mexico -17.1 percent
- Romania - 12.3 percent
- Russia -3.2 percent
- Spain - 18.5 percent
- South Africa -16.4 percent
- China +11.5 percent
