New Zealand’s GDP rose by 0.2% in the December quarter. While less than forecast, the figures support the story that the economy was regaining some momentum before the latest oil shock hit.
Key results
- Quarterly change: +0.2% (last: +0.9%, revised from +1.1%)
- Westpac f/c: +0.4%, market f/c: +0.5%, RBNZ: +0.5%
- Annual change: +1.3% (last: +1.1%, revised from +1.3%)
New Zealand’s GDP rose by just 0.2% in the last quarter of 2025, less than our forecast of a 0.4% increase and the median market forecast of 0.5%. Historical revisions were to the downside overall, with the September quarter revised down from +1.1% to +0.9%, against a smaller upward revision to the June quarter from -1.0% to -0.9%.
Given the ongoing volatility in the quarterly GDP figures, we recommend focusing on the annual growth rate. This came in at +1.3%, lower than our forecast of +1.6%, reflecting both the lower-than-expected December quarter and the revisions to recent history.
We don’t read too much into the December quarter ‘miss’, as it was entirely due to our old nemesis – the non-additivity between total GDP and the individual sectors. This difference was a large negative this time (and larger than in previous December quarters), for reasons that we’ll have to unpick later. The results by sector were largely in line with our forecasts, with the usual range of overs and unders.
Nevertheless, these results are on balance a downside surprise to our view, and to the RBNZ’s forecasts. Today’s figures may ultimately prove to be of little more than historical interest, given the pall cast over the global economy in recent weeks by the Iran conflict. But from the RBNZ’s point of view, they will note that while the New Zealand economy was regathering some momentum coming into this latest shock, it was still barely at a pace that would have halted the rise in unemployment or added to domestic inflation pressures.
Details
The results by sector were generally in line with what we detailed in our preview. The strongest gains were seen in the primary industries, and those linked to the ongoing recovery in tourism. The more domestically focused industries, such as construction and business services, were more subdued.
The expenditure measure of GDP was also soft, up just 0.1% for the quarter. Household consumption fell by 0.1%, though this likely reflects the ongoing issues with distinguishing between spending by households and by overseas tourists, the latter of which showed up in the 7.7% rise in services exports instead. Central government spending jumped by 2.5%, while business investment and goods exports fell. The latter two cases largely reflect timing issues, having both come off large gains in the September quarter. These were partly offset by an accumulation of inventories in the December quarter.
