New Zeland: Economic support package more massive than expected – Westpac

The New Zealand Government announced an additional $50bn of support and recovery measures to deal with the Covid-19 pandemic, a much larger stimulus than expected, per Westpac. NZD/USD trades at 0.5983.

Key quotes

“The Government has announced a $50bn economic recovery fund to tackle the Covid-19 pandemic, in addition to the $12.1bn package announced in March.”

“The Government has pledged to return the unemployment rate to its current level of 4.2% by June 2022, from an expected peak of 9.8% this year. That seems extremely ambitious.”

“With the Government providing more stimulus, there will be less for the RBNZ to do. This is, therefore, an upside surprise as far as our OCR forecast is concerned.”