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GM Fairfax assembly plant in Kansas City - Source: Reuters
New Zealand economist Gareth Kiernan says the failure of General Motors is likely to have flow on effects in New Zealand.
Kiernan, from economic forecasting group Infometrics, says the move is likely to be felt in a negative impact on commodity prices for the goods New Zealand exports.
"The flow-on effect potentially is quite large in terms of more shrinking economies for longer than we may have thought preciously and ultimately that comes back through to New Zealand and limits the potential for an export upturn here," he says.
Kiernan says the ripple effect could mean more stunted economic growth numbers across Europe and the rest of the world in the June, September and maybe December quarters as household spending gets hit.
However, the sharemarket may react differently.
Market analyst Jennie Moreton expects the bankruptcy will have little effect on New Zealand markets as the decision was signalled well in advance. If anything, she expects the implications to be positive.
"It's another stage that we're going through in this recovery
process. It signals that we're allowed to move on and move forward
from here...from that point of view it removes some of the doubt
around that company," she says.
