New Zealand is facing the biggest recession since the Great Depression, but despite the gloomy outlook Rotorua business leaders think forestry and agriculture will step to the fore.
The news comes hard on the heels of the Government's pre-Budget warning that debt levels will skyrocket as it prepares to re-ignite the country to combat the economic impacts from Covid-19.
ASB chief economist Nick Tuffley estimated by the end of 2020 the economy would be 7 per cent smaller than the same time last year due to Covid-19.
Following the Global Financial Crisis the economy shrank by less than 3 per cent over 18 months, he said, so ''this is undoubtedly the deepest recession we have had either since World War II or the Great Depression''.
''It is a really unnatural time and people have gone through a really sharp shock...which we've never really seen happening in history before.''
Debt could rise to 50 per cent of GDP over the next four years and take decades to pay down, he said.
A Westpac May 2020 Covid-19 special edition said it expected the Government's net core crown debt to rise to about $180 billion by 2024.
''New Zealand is now in a deep recession.''
The report estimated the unemployment rate would also rise to 9.5 per cent in June – the highest level in 27 years.
Chief economist Dominick Stephens said basically ''we were already actually on an unsustainable fiscal path because of the ageing of the population''.
''We all know that national superannuation is going to become unaffordable and that has just gotten a whole lot worse.''
He said there would be a limit to how much stimulus the Government can comfortably provide and the rescue measures would end up costing about $37b.
At the moment, the Government could borrow at .016 per cent interest but that could change if New Zealand's rating was downgraded.
''I think the Government should be borrowing heavily right now to help the economy get through this crisis. But the key to that is to make sure the measures taken now are temporary.
''So, for example, giving everybody a few hundred dollars to stimulate spending, that's fine because it doesn't commit future governments to anything but giving everybody an extra $25 per week is not as good an idea.''
But Stephens was expecting the recovery would be faster than the GFC because that scenario involved a banking crisis which took longer to come back from.
Rotorua Chamber of Commerce chief executive Bryce Heard said in terms of economic drivers the three primary industries in the region were forestry, agriculture and tourism.
Two of those sectors were still ''boxing on'' and ''in the case of forestry there is quite a bit of low hanging fruit for quick growth in job creation especially in added value processing''.
An extensive economic recovery plan was also in place for the city driven by Rotorua Economic Development and the council which the chamber was part of, he said.
Heard was also wary of forecasts and trends.
''I've seen a lot of ups and a lot of downs. And when you go down, everybody extrapolates the trends and tells you how bad it's going to get and it's going to last forever.
''When you're going up, everybody tells you how good it's going to get and how it's going to last forever.''
The current situation would turn around Heard said ''and we have got to make the ride from here to recovery as least uncomfortable as possible''.
Rotorua Economic Development chief executive Michelle Templer said she hoped the Budget would provide more clarity around the availability of long-term targeted support for the sectors that have been most impacted by Covid-19.
National leader Simon Bridges said if the economists were correct, the figures were eye-watering and could work out at more than $50,000 in additional government debt per household.
"The highest government debt New Zealand has ever had was the $62b we had immediately prior to the crisis.''
This newspaper reported on Saturday that the number of people receiving Jobseeker benefits in the Bay of Plenty had increased by more than 2600 since the lockdown began on March 25.
Ministry of Social Development figures as of May 1 showed there were 18,069 people on Jobseeker Support in the Bay of Plenty - that's 2622 more than at March 27, a jump of about 16.9 per cent in five weeks.
The figures rank Bay of Plenty as the second-highest region in New Zealand for needing job seeker support, following behind the Auckland Metro region's 60,400 job seeker beneficiaries.
Minister for Finance Grant Robertson has been approached for comment.