New Zealand: Economic growth accelerates in the first quarter of 2026
GDP reading: New Zealand’s GDP increased 0.8% on a seasonally adjusted quarter-on-quarter basis in Q1, following 0.5% growth in the prior quarter.
Drivers: Relative to the previous period’s data, readings in Q1 improved for private consumption (+0.5% on a quarter-on-quarter basis vs -0.1% in Q4), fixed investment (+2.0% vs -1.3% in Q4), exports of goods and services (+3.1% vs +0.5% in Q4) and imports of goods and services (+4.2% vs +1.3% in Q4). In contrast, the reading for government consumption softened in Q1 (+1.5% vs +2.1% in Q4).
Panelist insight: Goldman Sachs analysts said:
“Data provide further evidence that an encouraging economic recovery was building in New Zealand prior to the Middle-East conflict – and likely a little stronger than the RBNZ forecast once revisions are factored-in. Given this, and the strength of the RBNZ’s recent hawkish guidance that “in the near term we will likely need some OCR hikes”, we continue to expect a mini pre-emptive tightening cycle (+25bp in July/Sept).”
Digging deeper into the Q1 reading, United Overseas Bank’s Lee Sue Ann said:
“The latest GDP points to a modest but ongoing recovery in economic activity, with momentum improving relative to late 2025. Growth was supported by a range of sectors, including manufacturing, wholesale and retail trade, as well as professional services, suggesting a reasonably broad-based expansion. Overall, the composition of growth suggests that domestic demand is gradually stabilising, even as parts of the interest rate-sensitive sectors remain under pressure.”