New Zealand warned on Monday that the final cost of the devastating Cyclone Gabrielle, which has left at least 11 people dead, could rise above $8 billion as authorities announced emergency funding to help in the recovery efforts. Conway, who was testifying at parliament's Finance and Expenditure committee meeting, said that uncertainty around the central bank's GDP projections was higher than normal given that the full extent of the damage caused by the cyclone was still unknown.
The bank is predicting that New Zealand will move into a recession in the second quarter of this year before growth resumes in 2024. RBNZ Governor Adrian Orr earlier told the committee that the central bank predicts that over the next one to two years the rebuild will boost GDP by around 1%. "We put in our predictions around a 1% increase in GDP over the next one to two years, which is a reflection of that previous scale of the rebuild activities going on," he said. But added: "We know that entirely new construction and the rebuild will increase the level of activity and that will put upward pressure on inflation." (Reporting by Alasdair Pal in Wellington Editing by Lucy Craymer and Sandra Maler)
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