A prominent economist says New Zealand is already back in recession, we just don't know it yet.
But rather than a sign of a deteriorating economy, Cameron Bagrie says it's just cooling down a bit after the post-level 4 high of 2020.
"I actually think New Zealand's in a recession. It doesn't feel like it, because we're coming off that wave - that big springboard effect where the economy bounced back in the September quarter," he told The AM Show on Tuesday.
"But if you look at more timely economic data - traffic volumes, they've been easing off for the past couple of months; if you look at electronic card spending it's been down three months in a row.
'"A lot of that is just easing off the highs, the exuberance of post-lockdown spending. But what we know is the longer this lockdown, alert level restrictions go on, the more it's going to dent those GDP numbers that were already looking negative for the March quarter, prior to increases in the alert levels."
Auckland was plunged back into alert level 3 and the rest of the country into level 2 on Sunday night, with the discovery of three community cases of the highly infectious, and possibly more deadly, variant of COVID-19 first detected in the UK late last year.
The current restrictions are in place until 11:59pm on Wednesday - whether or not they come off depends on whether more cases emerge and if contact tracers can find the source of the infections. Bagrie says three days won't hurt the economy too badly, but business owners should be bracing for more.
"Three days is not going to hurt... if we look at the numbers and what's going to be the economic hit for Auckland in GDP terms? It's around $40 million a day at alert level 3, another $40 million per day at alert level 2 for the rest of the country.
"So there's $80 million - multiply it by three, you're up in excess of $200 million, you start multiplying it by seven, you're up in excess of $500 million. Those numbers add up."
But not as quickly as they did in last year's first lockdown, which caught many businesses flatfooted. Bagrie says then, Auckland was probably losing $60 million a day - but businesses have learned how to adapt.
Bagrie says the economy at the moment is sliding around a bathtub - up and down.
"If you look at the June quarter the economy got bashed around, September quarter we were off to the races - we came flying out of the door willy-nilly and euphoria took over. Some of that was carried over into the December quarter."
And now it's levelling off again. If the lockdown continues, Bagrie says it'll certainly see the economy contract in the March 2021 quarter. A recession is usually defined as two consecutive quarters of negative growth - which could happen thanks to the lack of international tourists.
"That was not a 2020 story - that was always going to be a 2021 story. International tourists are not here... yes we can technically call it a recession, that's what the numbers I think are going to show us."
New Zealand's economy fared better than most in 2020, despite - or some would say because of - the strict lockdown.