Weekly Global Economic Round-up - 28 January 2022

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Domestic Updates

  • As of 11:59pm 23 January 2022, Aotearoa New Zealand transitioned to the Red COVID-19 Protection Framework (CPF)(external link) setting. This decision was based on confirmation of Omicron cases in a household in the Nelson/Marlborough area and cases in Auckland.  The Red setting of the CPF is not a lockdown, and there are no domestic regional boundaries.  This announcement has no impact on New Zealand’s border settings, including the need for inbound travellers to book an MIQ place (except for those coming from QFT jurisdictions). Further information can be found here(external link). Business support schemes(external link) to enable staff to go on leave or isolate will continue to be available.
  • On 26 January, the Government announced(external link)  a three phase Omicron plan that aims to slow down and limit the spread of an outbreak. Further information can be found here(external link).

Global & Multilateral Updates

  • December marked the halfway point for Expo 2020 Dubai. So far, more than 10 million visitors have been to the Expo Park and a constant stream of high level visitors have been to the New Zealand Pavilion. A large number of events have been hosted at the Pavilion and at venues throughout the park, in support of New Zealand priorities and business interests.  January and February will be the busiest months at Expo, with a number of New Zealand-led activities including a three week Taste New Zealand showcase with renowned New Zealand chefs, street artists and a world class cultural and entertainment programme for two weeks in celebration of our National Day on 31 January and Food, Agriculture and Livelihoods Week in February. For more information about the New Zealand Pavilion and events at Expo 2020 Dubai visit www.nzatexpo.govt.nz(external link) or follow @NZatExpo(external link).

Regional Updates

Australia and the Pacific

  • As of 27 January, there are 27 confirmed positive COVID-19 cases in Samoa, 22 cases arriving on a flight from Brisbane last week and 5 additional cases of health frontline workers. Authorities are confident there is no community transmission. Meanwhile, all flights into the country are suspended until further notice. All Recognised Seasonal Employer (RSE) movement to New Zealand, and Labour Mobility to Australia, has been suspended until further notice.
  • The Cook Islands economy is forecast to grow by 12% this year. The better than expected economic projections contained in the recently released Half Yearly Fiscal and Economic Update are largely due to the resumption of tourism in January, and revenue from when the border was last open, May-August 2021. Economic growth will nevertheless experience strong headwinds this year due to significant labour shortages, uncertain tourist numbers and the risk the Omicron variant presents. In the short-term, economic recovery for the Cook Islands is dependent on visitor arrivals.  But diversification will be necessary to ensure the resilience of its economy to future shocks.  Prime Minister Brown recently commented that: “2022 will be a defining year for our country, as we not only reopen for business but seek to diversify our economy and the opportunities for our people by turning to the wealth of our ocean.

Asia

  • The Sri Lanka economy is facing economic headwinds as result of the global impact of the COVID-19 pandemic and debt repayments. Inflation is rising and S&P has downgraded Sri Lanka’s credit rating to CCC. The Sri Lankan government is in negotiations with bilateral partners with regards to Sri Lankas debt holdings.

Europe

  • Following the opening of a “Taiwanese Representative Office” in Vilnius last year, China has imposed measures that have had a significant impact on Lithuania’s exports to China, including measures impacting customs declarations, halting freight trains to Lithuania, stopping issuing food export permits, cutting credit lines, and raising prices for Lithuanian companies.

Americas

  • The US has won its case challenging Canada’s administration of dairy tariff rate quotas under the United States-Mexico-Canada Agreement (USMCA) (which substituted the North American Free Trade Agreement on 1 July 2020).  The Panel found that Canada was breaching USMCA by reserving the vast majority of each quota exclusively for Canadian dairy processors.  Having made this finding, the Panel elected not to consider the other four claims made by the US. In accordance with the USMCA, Canada is required to resolve this inconsistency by 3 February 2022.  Officials will be watching closely to see what changes Canada makes to its tariff rate quota administration as a result of the decision, including whether those changes are extended to its Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) tariff rate quotas.

Middle East and Africa

  • COVID-19 cases, test positivity rate and hospitalisations continue to decrease in South Africa. Travel bans have now been lifted by many countries including the US, the UK, EU member states. In addition, after a 21-month break, Qantas has resumed direct passenger flights between South Africa and Australia. The UAE continues to have a travel ban against South African travellers, thus suspending Emirates flights out of Johannesburg. Singapore Airlines and Qatar airlines are the most direct flight options for New Zealanders looking to return to New Zealand.

Market reports released this week

  • The previous global economic round-up can be found here.

External links

The following links may provide useful information to businesses:

  • NZTE(external link) has a website focused on providing COVID-19 information for exporters. They’ve also launched myNZTE(external link), an interactive digital portal of insights and tools available to all New Zealand exporters.
  • The Treasury releases a weekly economic update(external link) every Friday. Stats NZ has published a data portal(external link) with near real-time economic indicators.
  • MBIE publishes a sector reports series(external link) which provides regularly updated reports on all industry sectors that make up the New Zealand economy. These include official economic data and the challenges and opportunities that face New Zealand’s industry sectors.
  • govt.nz(external link) provides tools and advice from across government to save small businesses’ time and help make the business a success.
  • MFAT has created a tariff finder(external link) which is designed to help goods exporters and importers maximise benefits from New Zealand’s Free Trade Agreements and compare tariffs in 136 other markets.
  • The all of government Trade Barriers website(external link) can be used to register any trade barriers experienced or issues exporting to an offshore market. Queries can be sent via the website or through the MFAT Exporter Helpline 0800 824 605. Enquiries will be sent to the government agency best placed to answer.

To contact our Export Helpdesk

Disclaimer

This information released in this report aligns with the provisions of the Official Information Act 1982. The opinions and analysis expressed in this report are the author’s own and do not necessarily reflect the views or official policy position of the New Zealand Government. The Ministry of Foreign Affairs and Trade and the New Zealand Government take no responsibility for the accuracy of this report.

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