Weekly Economic Commentary

New Zealand's economy showed signs of recovery in Q1 with unemployment falling to 5.3%, but the Iran conflict has since spiked oil prices and broadened inflation risks. Consequently, Westpac now expects RBNZ interest rate hikes to begin in September 2026.

Key Takeaways

• 1.The New Zealand economy was beginning to stabilize with a declining unemployment rate (5.3%) before the Iran conflict disrupted expectations.
• 2.Westpac has pulled forward its RBNZ OCR hike expectations to September 2026 (from December) due to broadening inflation pressures from the Middle East conflict.
• 3.The Iran-US conflict has spiked oil prices, which is stalling NZ retail spending and shifting consumer habits toward essential goods.

Table of Contents

• All right so far
• Chart of the week.
• Fixed versus floating for mortgages.
• Global wrap
• Financial markets wrap
• The week ahead
• Economic and financial forecasts
• Data calendar

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