The world is witnessing the biggest destruction of wealth ever in the current economic downturn, the governor of New Zealand's central bank, Alan Bollard, said Friday.
If the amount of money lost was represented in one dollar bank notes, they would reach the sun, Bollard told a crisis business summit organized by the new centre-right government to come up with ways to save jobs, dpa reported.
Bollard estimated that the amount of money lost in global stock markets totalled 30 trillion dollars - a sum that could eradicate poverty in the developing world in 10 years.
He quoted an International Monetary Fund (IMF) estimate that losses flowing out of the sub-prime crisis and the subsequent disruption to the financial sector would eventually amount to about 2.2 trillion dollars, plus 4 trillion dollars in housing values and 3 trillion dollars in lost production.
But the Reserve Bank governor said the world was nowhere near Depression-level economic conditions.
"Unemployment rates will certainly continue to rise, but peak well short of the levels reached in the Depression," he said. "Then, unemployment rates rose well above 20 per cent in many cases."
Bollard said that while the New Zealand economy entered recession earlier than many countries - a year ago, partly because of drought that hit farm production - its effects had so far been "quite mild by both international and historical standards."
Unemployment was 4.6 per cent at the end of last year and the Treasury has tipped it to rise to 7 per cent, though some analysts are forecasting that it will reach double-digit figures.
Prime Minister John Key, whose government was elected in November, called the business summit to reassure voters that his administration could deal with the worsening economy.
"We are a gritty little country with the smarts and determination needed to weather this storm," he told the opening session.
"We are not a country of whiners," he said. "We are not a country of slackers. We are not a country of selfish individuals."
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