New Zealand’s border restrictions will remain a headwind for the country and its tourism industry in 2021, says ASB.
The bank’s Watch list for 2021 noted the Covid-19 pandemic would continue to have “a major bearing on the outlook for 2021” and would dominate politics and the economy.
“New Zealand can rightly feel proud for how we have pulled together and demonstrated flexibility and resilience,” ASB said.
“However, the border restrictions remain a headwind and will be felt more acutely over the peak summer months for inbound tourism.”
The rollout of the vaccine this year would take time and there there were “still pockets of pain out there and the jobless queue has grown”.
However, ASB said the country’s successful efforts in tackling the spread of Covid-19 had “increased New Zealand’s allure as a safe-haven destination and good place to live and work”.
“This should leave New Zealand in an enviable position of being able to pick and choose who settles here.
“It remains to be seen if policymakers revert to pump-priming the economy via encouraging mass immigration and tourism.”
Much hinged on what happened at the country’s border.
“The New Zealand border restrictions have reduced immigration inflows from a flood to a trickle,” ASB said.
“They have also dramatically shrunk our $17.5bn market for inbound tourism and the $4.2bn of annual international student expenditures.
“When the borders do open is still unknown, although signs are hopeful there will be a staged reopening of the border sometime this year.”
ASB said it was hopeful that the worst of the pandemic had now passed and 2021 “would provide the chance to recharge and set the scene for an upswing over 2022”.
“Let’s hope so,” the bank said.
“But, going by what has happened over the last 12 months, there is no guarantee there will be smooth sailing ahead.”
Download ASB’s Watch list for 2021 here.
13 Jan 2021 Govt stiffens border requirements