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New Zealanders are still reporting negative impacts on mental health and income from the coronavirus pandemic, despite living in one of the world's few countries to have largely returned to normal.

The Pacific island nation, which has had only about 2,200 cases and 26 deaths in a population of 5 million, enforced strict lockdowns and social distancing rules that helped to virtually eliminate the virus.

But it's now undergoing what economists call a 'K-shaped' recovery in which wealth inequalities are widening, compounded by surging property prices and a housing shortage. read more

The survey, released to Reuters, shows 46% of New Zealanders said they or a household member had trouble sleeping because of the spread of COVID-19, higher than the 43% recorded by the survey in June-July last year. About 40% continue to say they feel depressed. (Survey link: https://bit.ly/2Sb53SZ)

"As one of the very few countries in the world that is largely back to 'normal', we would have expected mental health to improve," said Jagadish Thaker, senior lecturer at the School of Communication, Journalism & Marketing at Massey University in Wellington, who published the report.

"But our survey shows that a substantial proportion of the public is still struggling with economic and mental health issues."

The findings highlight the lasting impact of the pandemic on people's lives, raising concerns about other nations suffering a more severe crisis. (FACTBOX on the global spread of coronavirus read more )

One in five who participated in the survey said they or a household member lost income from a job or business, while nearly one in nine said they or a family member lost a job or have filed for unemployment benefits, showing little improvement from last year.

The survey found poorer ethnic minorities were disproportionately affected, with Māori, Pasifika, and Asians two to three times more likely to have lost a job and filed for employment benefits.

"Together, these findings suggest that government should increase momentum on policies supporting individuals and communities most impacted by COVID-19," Thaker said.

Failure to do so could mean Prime Minister Jacinda Ardern will squander much deserved international recognition from tackling the spread of COVID-19, he added.

New Zealand will hand down its annual budget on May 20, which is expected to focus on tackling COVID-19 and its impact. The government did not immediately respond to a request for comment.

The report was based on a survey of 1,083 New Zealanders between Feb. 15 and Mar. 6, and is yet to be made public. (Reuters)