New Zealand’s economic outlook has been notably downgraded by the New Zealand Institute of Economic Research (NZIER), with projections pointing to zero GDP growth for fiscal 2025, a stark revision from the previous forecast of 0.6%.
Growth is expected to pick up modestly to 2.2% in 2026 and further to 2.8% in 2027, though these estimates are also lower than those given earlier in the year. The institute’s June forecast had previously anticipated 2.4% growth in 2025 and 3.0% in 2026, highlighting the extent of the shift in expectations.
Inflation estimates have similarly been revised downward. CPI is now expected to come in at 2.3% for 2024, down from the 2.6% forecast in June. For 2025, CPI is projected at 2.0%, revised from the earlier estimate of 2.1%, while the 2026 forecast remains unchanged at 2.1%.
NZIER pointed to concerning signals from its own Quarterly Survey of Business Opinion, which has shown a sharp drop in business confidence and in firms’ trading activity. This data suggests that the near-term outlook is particularly weak, with businesses expecting tougher conditions ahead. The slowdown is expected to persist through 2025, with lower interest rates forecasted to provide some support in stimulating a recovery beyond that.
, with projections pointing to zero GDP growth for fiscal 2025, a stark revision from the previous forecast of 0.6%.){kind=link}