New Zealand is bracing for a hit to its economy of around half a per cent as a result of the coronavirus outbreak.
Fresh modelling from Treasury announced by Prime Minister Jacinda Ardern on Monday has shrunk forecast GDP growth to between 2.0 and 2.5 per cent in 2020.
The tourism, forestry and education sectors are among those feeling the bite from the global outbreak which has origins in China’s Hubei province.
Ms Ardern said the Kiwi government was exploring plans to counteract the travel and trade restrictions resulting from the virus.
“The government’s primary objective must always be first and foremost the public health or New Zealanders,” she said.
“This is not to preclude the steps we’re also taking to limit the effect as much as possible on the New Zealand economy.”
Tourism funding of around $NZ11 million ($A10.5 million) will be redirected to other markets – including Australia – as New Zealand seeks to fill the void left by Chinese visitors.
As logs rapidly fill up storage capacity at Kiwi ports, the government will also look at tax incentives or support to contractors in the forestry industry.
And Ms Ardern confirmed she was working with the university sector on avenues to retain international students set to land in New Zealand to begin their academic years.
On Saturday, health minister David Clark extended the travel ban for another eight days.
Kiwi citizens, permanent residents and their immediate family returning to New Zealand are able to leave China for home but are being asked to quarantine themselves for a fortnight.
While the extent of the travel ban and the spread of the virus is yet to be seen, Ms Ardern said Treasury’ had revised growth projections in 2020 from their previous estimate of 2.2 to 2.8 per cent to 2.0 to 2.5 per cent.
“This is not unique to New Zealand. The global impact of course is being felt widely not least in China itself,” Ms Ardern said.
“The Reserve Bank was looking at an impact of 0.3 per cent. Banks were looking at between 0.5 and 0.6.
“There is confirmation really from all quarters now, everyone believes there will be an impact. The question is how large and how long.”