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Recession puts New Zealand back seven years in recession: think-tank

03-14-2012 16:03 BJT

WELLINGTON, March 14 (Xinhua) -- New Zealand's economy has " lost seven years" in the global economic downturn since 2008 and is currently back at its 2005 level, an economic think-tank announced Wednesday.

While real GDP per capita had reversed seven years, the unemployment rate -- at about 6 percent of the labor force -- had lost 12 years, according the New Zealand Institute of Economic Research (NZIER).

The NZIER Insight said the economic loss was "similar to that of Italy and France, and better than Britain or the United States. "

"Greece has lost 12 years. Australia performed better; its clock has only wound back to late 2008."

New Zealand had been "living on borrowed time," said the Insight.

"Over the past decade, we (and other countries) borrowed growth and income from the future. We are now living through that future with subdued economic growth while we restore our balance sheets."

The indicators highlighted "important policy lessons," it said.

"Short-term borrowed growth should not be wasted on poor economic policies that do not address our productivity challenges or other long-term issues stemming from an aging population. For the central bank, it shows the perils of asset bubbles and excessive credit creation.

"Lost economic time will have long-term implications, for example, for retirees whose savings are smaller or for the unemployed who, if they lose touch with the labor market, will find it hard to get jobs in the future."

Other figures in the Insight showed real consumption per capita had "lost" four years; real stock returns had lost eight years; real house prices lost six years; and real wages lost three years.

The total time lost to the economy was seven years, it said.

Editor:Wang Lingfei |Source: Xinhua

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