WELLINGTON - New Zealand businesses including malls, cinemas, cafes and gyms will be allowed to reopen from Thursday as tight restrictions put in place to stop the spread of the coronavirus were further eased on Monday.

The Pacific nation was locked down for more than month under "level 4" restrictions that were eased by a notch late last month. It has continued to enforce strict social measures on many of its citizens and businesses, helping prevent widespread community spread of the virus.

Prime Minister Jacinda Ardern said the move to "level 2" restrictions will mean retail, restaurants and other public spaces including playgrounds can reopen from Thursday.

"I am announcing that Cabinet agrees we are ready to move into level 2, to open up the economy, but to do it as safely as possible," Ardern told a news conference.

Businesses will be required to have physical distancing and strict hygiene measures in place.

Schools can open from next Monday while bars can only reopen from May 21, Ardern said. Gatherings would be limited to 10 people.

"The upshot is that in 10 days' time we will have reopened most businesses in New Zealand, and sooner than many other countries around the world," Ardern said.

The country's borders would remain closed except for returning New Zealanders.

The measures would be reviewed again in two weeks, Ardern said.

Three new cases of COVID-19, the disease caused by the novel coronavirus, were confirmed on Monday, the health ministry said in a statement.

The cases - two hospital nurses and one related to overseas travel - bring New Zealand's total confirmed COVID-19 infections to 1,147, the ministry said, adding that 93% of all confirmed and probable cases have recovered.

The government will unveil its annual budget on Thursday, and has warned the country would run fiscal deficits for years while debt will increase to levels well beyond previous targets due to its economic support measures.

Reuters