Under pressure from businesses and public sectors facing a worker shortage that policymakers fear will fuel inflation, New Zealand Prime Minister Jacinda Ardern is due to unveil plans this week to reopen the country's borders.

Ardern garnered global praise for containing local transmission of Covid-19 via an elimination strategy, imposing tough lockdowns and slamming New Zealand's international border shut in March 2020.

However, that tactic is now straining an economy heavily reliant on...