Cyclone Gabrielle could cost New Zealand $13.5 billion
The cost of repairing the damage wreaked by Cyclone Gabrielle could reach NZ$13.5 billion ($8.42 billion), says Finance Minister.
A furious cyclone that struck New Zealand’s northern territory on 12 February, and which raged across Hawke’s Bay and Gisborne for four days, has caused billions of dollars worth of damage.
Grant Robertson, the country’s Finance Minister, revealed this week that the cost to New Zealand’s government may be similar to that following the Christchurch earthquake in 2011, which until now was considered one of the most devastating natural disasters to hit the country.
“This will be a significant event financially for the government and for individuals, households, businesses, banks and insurers,” Robertson told broadcaster TVNZ of Cyclone Gabrielle.
Much of the damage has been caused by flash flooding, which has destroyed roads, rail tracks, houses and crops. Evacuation centres provided shelter for some 2,000 people in the Hawke’s Bay area and helicopters have been deployed to deliver food and water to stranded villages.
Fifteen fatalities have been confirmed so far.
Economists are already warning of the impact the cyclone will have on the cost of daily living. Analysts say that a surge in prices looks likely following the disruption, with inflation, already running at an almost 30-year high of 7.2%, expected to climb as the country looks to repair its infrastructure. Loss of crops will also push up food prices.
The disaster has prompted financial markets to downgrade the outlook for interest rate rises.
According to a Reuters report, ANZ chief economist Sharon Zollner said: “As the scale of the devastation has been gradually revealed, the market has all but priced out the chance of the Reserve Bank of New Zealand (RBNZ) going ahead with the 75bp hike it signalled last November.”
Meanwhile, Kiwibank’s chief economist Jarrod Kerr said that the central bank should pause hikes until the effect of the cyclone can be fully understood.
“Current circumstances warrant caution. But what we think they [RBNZ] should do is not what they will likely do,” he said.
Wineries in the North Island are in the midst of taking stock of the damage caused to vineyards at this critical time in the season.
Chris Scott, Church Road’s regional winemaker for Hawke’s Bay, told the drinks business: “Cyclone Gabrielle has had a significant impact on the area and we will need to assess the impact to the harvest. We are dealing with it, but we have an incredibly talented team at Church Road that pulls together no matter what situation arises.”
Scott describes how the event follows on from a challenging harvest last year “when most of our night shift were at home isolating for COVID just at the peak of the red intake”.
Villa Maria’s director of winegrowing, Peter Materman told db: “We are currently ascertaining the extent of any vineyard damage in Gisborne and Hawkes Bay caused by Cyclone Gabrielle. Whilst our wineries in these regions have fared well, we do expect some crop loss. Harvest is due to start next week, but this will depend on being able to access the vineyard blocks.”
Winemakers in other regions across New Zealand have shown up in sympathy for their friends and colleagues in the north.
“We have just witnessed the North Island of New Zealand get completely whacked by Cyclone Gabrielle and are very aware of how difficult (impossible) V23 will be for so many of our fellow winegrowers,” said Matt Mitchell, general manager – winery for Marlborough-based Marisco Vineyards, which counts The Ned and Leefield Station among its brands.
“As a Marlborough-based wine business, now is not the time to start critiquing the weather and bemoaning any less than ideal growing conditions for us,” he told db.