Coronavirus pandemic: New Zealand 'well-placed' to ride out COVID-19 crisis - expert

New Zealand is "well-placed" to ride out the coronavirus COVID-19 outbreak, according to an expert. 

On Tuesday, Finance Minister Grant Robertson released initial details of its support package for businesses impacted by COVID-19 - worth $12.1 billion.

Reacting to the announcement, New Zealand Initiative executive director Dr Oliver Hartwich said the country was now "well-placed" to respond to the crisis.

"We're starting, still, at a relatively low number of cases confirmed," Dr Hartwich told Magic Talk's Stephen McIvor on Tuesday. 

"We're starting from a relatively low level of public debt - under 10 percent of GDP - if you're looking at European countries, take Italy for example, they have a country in lockdown and 135 percent debt."

Robertson said on Tuesday New Zealand's package was one of the largest COVID-19 responses in the world on a per-capita basis - nearly 4 percent of the country's GDP.

Dr Hartwich said while New Zealand was well-placed, countries like Italy were in danger of going bankrupt.

"It's going to be incredibly tough. When I look at the European Union (EU) - in particular when I look at Italy - it brings back memories of the debt crisis.

"Italy also has a fragile banking system on top of that - it will be really hard to bail out a country like that."

Dr Oliver Hartwich.
Dr Oliver Hartwich. Photo credit: File

On Tuesday morning (NZ time), Leaders of the EU agreed to close its external borders for 30 days. 

"I have my doubts whether the construction of the Euro [currency] for example is sustainable after the crisis," Dr Hartwich told Magic Talk. "I think we are at risk of seeing a mighty financial crash in Europe," he added.

The stock exchange, meanwhile, will "swing widely" in each direction, Dr Hartwich said.

"We'll just have to see how the next few weeks play out - if Europe doesn't get the problem under control," he said. "If the measures are not enough that they're currently taking in European countries, then I think it is likely we will see a further slide in European stock markets."