COVID-19: New Zealand facing 'all the downs' but not in a 'Chicken Little scenario' yet - economist

A leading economist says New Zealand's post-lockdown economic rebound may be ending but comments by former Prime Minister John Key that a crisis is coming isn't a term people should "throw around".

On Wednesday, Key said "we have a financial crisis coming" during a keynote speech at a COVID-19 summit in Auckland.

Cameron Bagrie told The AM Show on Tuesday that while times are tough and a financial crisis was a potential scenario, it shouldn't be a central focus at the moment.

"At the moment New Zealand is facing all the downs; down one was the lockdown - down two is the shutdown; border control that's going to remain for a while, down three is slowdown; the global economy is slowing.

"The Chicken Little scenario and the one we need to be careful about talking about is the potential for a meltdown - that's the financial crisis. That's a scenario - I wouldn't put it out there as a central one at the moment."

Bagrie said certain things could impact whether New Zealand enters a crisis, including how long COVID-19 stays around for.

He said the longer COVID-19 causes damage to economies around the world, the more likely a financial crisis will hit New Zealand.

"The world is locking down and we live in a globally connected world - so we can only hold up our side of the bargain for so long. Pat on the back, we are doing incredibly well."

On Wednesday, Key called for a trial to kickstart the gradual return of international students as part of New Zealand's economic recovery.

"If you think about our education sector [nationwide], there's a big revenue flow from international students. I think we can turn that tap back on quite successfully," he said.

"For [places] like Auckland University, AUT, Massey, they rely enormously on foreign students - that would be a lifeline for them."   

A report released in May estimated international students who studied in New Zealand for a year or less spent $12.9 billion in the year to March 2019.

Key on Thursday accused Prime Minister Jacinda Ardern of being disinterested in the economy but Finance Minister Grant Robertson said the Government is confident of its economic response.