17 Feb 2020

Covid-19 to have a negative impact on NZ's GDP - Ardern

5:59 pm on 17 February 2020

Prime Minister Jacinda Ardern says the Covid-19 coronavirus will have a negative - but temporary - impact on New Zealand's GDP.

Prime Minister Jacinda Ardern at a post-Cabinet briefing.

Prime Minister Jacinda Ardern at a post-Cabinet briefing. Photo: RNZ / Rebekah Parsons-King

Speaking at a post-Cabinet press conference today, Ardern said while it was too early to know what the overall impact the virus would have on the country's economy, agencies had been working to mitigate the impact.

"While it's clear that this will have an effect on the first and second quarter of 2020, Treasury expect economic activity to return to normal as global growth picks up and supply conditions normalise in the second half of 2020."

She said Treasury was now estimating that economic growth in 2020 will be between 2 and 2.5 percent.

Watch the PM's press conference here:

Ms Ardern said this is not unique to New Zealand and the country is able to head off these global impacts because "our economy is in good shape".

Ardern announced that the government will spend $11 million on a tourism package to buffer the effects of the coronavirus on the sector.

She said $10m will go to Tourism New Zealand to diversify its marketing in country's other than China.

Ardern said she knows there are many people around the world who are looking for a place to visit.

"We envisage this increased marketing will particularly help with Australia, the UK, USA and Asia to New Zealand and we hope that this short-term investment will help to alleviate some of the pressures our tourism sector are feeling post the border closures with China."

The other $1m will be targetting at domestic tourism in affected areas, including Auckland, Rotorua, Queenstown and Christchurch.

"Too often we perhaps neglect our domestic tourism market, we know that those regions that are specifically being impacted by the decrease in Chinese tourism," Ardern said.

New Zealand's travel restrictions have been extended until next Monday at midnight, putting a further strain on tourism businesses.

Ardern said Cabinet also discussed ideas for helping the forestry industry, and Minister Shane Jones will take a paper to Cabinet committee this week.

Jones this morning told Morning Report that China's ports had been dealing with "mountains of logs" coming out of Eastern Europe, felled due to a beetle attack that had ravaged forests, at the same time as the disruption from coronavirus.

Australia has indicated it would fly out the 11 New Zealand citizens on board the cruise ship Diamond Princess, which has been moored in Yokohama since 3 February, if it evacuates its citizens from the ship where 355 people on board have tested positive for Covid-19.

Meanwhile, speaking to Morning Report earlier today Ardern said the New Zealand First Foundation - which faces investigation from the SFO - has nothing to do with her or deputy Prime Minister Winston Peters' role in her Cabinet.

"Actually these aren't matters for me, these are matters for New Zealand First," she said.

At this afternoon's press conference, Ardern repeatedly refused to comment on the case.