* PM Ardern reopens NZ in staggered approach
* Retail, local travel and cafes to open on Thursday
* Schools open next week, bars on May 21
* Most businesses to be open in 10 days - PM Ardern
(Adds more details, Air NZ plans and reaction on social media)
By Praveen Menon
WELLINGTON, May 11 (Reuters) - New Zealand businesses including malls, cinemas, cafes and gyms will reopen on Thursday after some of the tightest restrictions in the world to stop the spread of the coronavirus were further loosened on Monday.
The Pacific nation was locked down for more than month under "level 4" restrictions that were eased by a notch in late April. 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 staggered move to "level 2" restrictions will mean retail, restaurants and other public spaces including playgrounds can reopen from Thursday.
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 told a news conference.
"But that fits with our plan – go hard, go early – so we can get our economy moving again sooner, and so we get the economic benefit of getting our health response right."
Businesses will be required to have physical distancing and strict hygiene measures in place.
Air New Zealand AIR.NZ announced it would resume seven more domestic routes when the country enters alert level 2.
International travel, however, would not be possible as borders will remain closed except for returning New Zealanders.
The measures would be reviewed again in two weeks, Ardern said.
The government plans to introduce a new law that would allow authorities to enforce physical distancing and control gatherings of people after questions were raised about the legality of lockdown rules.
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.
Ardern has been under pressure to ease the lockdown measures with the main opposition National Party saying they were kept on for too long, crippling several small businesses and hurting the economy.
People who could not make it to weddings, funerals or even visit loved ones had also called on the government to ease curbs sooner.