New Zealand economy outlook improves as oil prices fall, ASB says

ASB economists say the New Zealand economy is showing greater resilience than expected, with the latest quarterly forecast indicating a marked improvement. Falling global oil prices have eased inflation pressures, allowing household spending and business costs to recover after a recent fuel‑price shock. Gross domestic product grew 0.8% in the March quarter and revised data suggest stronger, broader‑based growth.

The institute projects consumer‑price inflation to rise to about 4.1% in the year to June 2026, then ease in the second half of the year as oil prices remain low. The Reserve Bank is expected to keep the Official Cash Rate on hold until at least September, with gradual increases only later. Export sectors such as dairy and meat continue to benefit from strong global demand, while tourism has rebounded to roughly 93% of pre‑COVID levels. ASB cautions that geopolitical risks, particularly in the Middle East, could still affect the outlook, but the overall recovery appears back on track.