Economies coming roaring back

Restrictions on activity have lifted in both countries. While some states in Australia still limit the size of groups and capacity at restaurants, New Zealand has now lifted all domestic restrictions. The reduction in restrictions has contributed to a pick-up in spending in both countries with consumption bouncing back further than expected in May and surely rising again in June. However, we think the borders of both countries will remain closed until the middle of next year which prevents a full bounce-back of either services exports or migration. That will keep GDP below its pre-virus level in both countries for at least the next year.