COVID-19 and the subsequent lockdown by many countries led to the global supply chain being an “absolute mess”, and it could take up to six months for it to start operating again, a Kiwi economist warns.
Chief economist Cameron Bagrie of Bagrie Economics says lockdowns have caused a “pretty big” disruption since there was less spending and producing of goods.
“When you send everyone home – and this has not just happened in New Zealand, it happened around the globe and it started in China – people are not spending at home, but they’re also not producing,” he told Magic Talk.
“And then all of a sudden when we go down to various lockdown stages, the global economy’s now starting to open up, we’ve got a little bit of pent-up demand and people are starting to rush out there to get a haircut and all those sorts of things.”
He adds although people want to purchase goods they needed during lockdown, sometimes they’re nowhere to be found.
“They’re looking at ‘where are the items’, well there are no items because the global supply chain is an absolute mess at the moment. Things have been shut down.
“It’s going to take three to six months to really get that back online. And of course, big parts of the global economy at the moment are still not fully operational either.”
These “big parts” include international borders being shut, which counts for roughly five percent of the economy.