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The Covid-19 situation has escalated dramatically and New Zealand is inevitably heading for a severe recession, in the opinion of analysts at Westpac Institutional Bank.

Key quotes

“The Covid-19 recession will be deeper than the GFC. We expect GDP to decline 3.1%, compared to 2.7% in 2008/09.”

“We expect unemployment will rise from 4% to 5.5%, or by 45,000 people.”

“We predict that the RBNZ will begin quantitative easing within a week in order to keep interest rates low.”

“Government debt is likely to rise above 30% of GDP in short order.”