New Zealand Economic Forecast

New Zealand Economic Outlook

August 24, 2021

The economic recovery likely continued in the second quarter, albeit at a slower pace. A strong expansion in electronic card transactions, combined with a considerable fall in the unemployment rate and higher consumer confidence, hints at robust household spending. Meanwhile, a surge in residential building permits and healthy PMI readings in the period point to a sustained recovery in activity. Moving to the third quarter, conditions seem to have remained fairly positive so far: In July, consumer confidence was still comfortably in optimistic territory and business conditions remained strongly upbeat, although business sentiment turned pessimistic. However, the country entered a fresh lockdown on 17 August, amid concerns over the Delta variant. The new measures could weigh on momentum in Q3.

New Zealand Economic Growth

The economy is set to bounce back strongly this year, supported by recovering domestic and foreign demand amid the gradual lifting of restrictions and expansionary fiscal and monetary policy stances. That said, uncertainty stemming from the spread of new Covid-19 variants both globally and domestically, and an overheating housing market pose downside risks. FocusEconomics panelists project the economy to grow 5.3% in 2021, which is up 0.1 percentage points from last month’s estimate, and 3.0% in 2022.

New Zealand Economy Data

2015 2016 2017 2018 2019
Population (million)4.64.74.84.95.0
GDP per capita (USD)37,79139,06941,85341,79740,700
GDP (USD bn)176185203206205
Economic Growth (GDP, annual variation in %)3.53.93.13.22.3
Consumption (annual variation in %)3.65.65.23.22.7
Investment (annual variation in %)4.03.45.05.32.7
Exports (G&S, annual variation in %)7.72.32.32.62.3
Imports (G&S, annual variation in %)4.03.46.85.91.5
Manufacturing (annual variation in %)1.92.82.91.40.9
Retail Sales (annual variation in %)5.95.35.33.13.5
Unemployment Rate5.45.14.74.34.1
Fiscal Balance (% of GDP)0.20.71.51.92.5
Public Debt (% of GDP)35.133.731.830.428.1
Money (annual variation in %)14.22.1-  -  -  
Inflation Rate (CPI, annual variation in %, eop)0.11.31.61.91.9
Inflation Rate (CPI, annual variation in %)0.30.61.91.61.6
Inflation (PPI, annual variation in %)-1.30.84.83.42.1
Policy Interest Rate (%)2.501.751.751.751.00
Stock Market (annual variation in %)8.54.517.31.426.0
Exchange Rate (vs USD)0.680.690.710.670.67
Exchange Rate (vs USD, aop)0.700.700.710.690.66
Current Account (% of GDP)-2.8-2.0-2.7-3.8-3.0
Current Account Balance (USD bn)-5.0-3.8-5.5-7.9-6.1
Trade Balance (USD billion)-2.5-2.2-2.0-4.3-2.9

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New Zealand Facts

Value Change Date
Bond Yield1.671.20 %Dec 30
Exchange Rate0.67-1.69 %Jan 01

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