International risk assessment firm Fitch Solutions has advised clients that Jacinda Ardern will serve a second term as New Zealand Prime Minister.
But the report,headlined Second Term Likely In The Bag For Prime Minister Ardern In New Zealandsuggests Ardern’s “star quality has faded” in this campaign.
“We expect her centre-left Labour Party to secure another comfortable majority,” the Fitch Solutions said in its pre-election briefing for investors.
The most likely outcome was a centre-left, Labour-Greens coalition, it said, citing the latest Colmar Brunton poll.
The prospect of National regaining its dominance in government was now slim but not impossible, it said.
Agencies like Fitch provide assessments for investors to assess risk around both private companies and sovereign nations.
Fitch Solutions Country Risk & Industry Research is part of the same group as the global credit ratings agency, although it is an independent unit.
Based on its assessment of a Labour-Green coalition win, Fitch has retained ashort-term political risk index (STPRI) score for New Zealand of 84 out of 100.
That indicates a very high level of stability, by comparison Australia has an STPRI score of 74.
Under the leadership of Ardern the government was “considerably successful with tough lockdown measures rolled out in March an April”, the report said.
It notes that the country was “virus free for nearly 100 days till August and that a second wave which began in Auckland, was quickly contained within a few weeks of new lockdown measures”.
Meanwhile, the government managed to provide sufficient support to the economy to keep the unemployment rate in check with businesses receiving subsidies for maintaining their payrolls, Fitch said.
“All this gives the party a natural edge over their rivals and it is likely that ultimately most voters will choose continuity over new uncertainty amid crisis.”
Fitch did suggest that some of Ardern’s star-power has diminished.
Ardern’s “star quality, that saw her through the elections in 2017 had faded
somewhat”, it said.
“In fact, political critics have argued that the prime minister cuts a dower figure now in comparison to her effervescence in 2017.
Nevertheless, Ardern is a well-liked personality and has consistently been 30 points ahead of any of her possible opponents throughout her first term.”
Fitch notes that New Zealand will be the third country after South Korea (parliamentary polls in April) and Singapore (general elections in July) to hold nationwide elections through thepandemic crisis.
In the other two cases, the handling of the crisis had a significant effect in determining the vote and incumbents comfortably retained power.
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