Economic Overview New Zealand

Westpac forecasts New Zealand's GDP growth to accelerate to 3.3% in 2026, driven by lower interest rates and strong agricultural exports. However, persistent core inflation will likely lead the RBNZ to begin raising the OCR from its current stimulatory 2.25% level starting in late 2026.

Key Takeaways

• 1.New Zealand economic activity is expected to lift significantly by 3.3% in 2026, supported by firm commodity prices and low interest rates.
• 2.The RBNZ is expected to keep the stimulatory 2.25% OCR until late 2026, when it will likely begin raising rates toward neutral levels as capacity erodes.
• 3.Inflation remains sticky and is expected to linger above 2% throughout 2026 due to administered costs and persistent core price pressures.

Table of Contents

• A note from Kelly
• Overview
• Recent economic developments
• Households
• Labour and migration
• Housing
• Construction
• Business conditions
• Fiscal
• Global outlook
• Agriculture
• Exports and balance of payments
• Inflation
• Monetary policy
• Monetary policy scenarios
• Foreign exchange
• The economy in eight charts
• Economic and financial forecasts

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