New Zealand economy shows resilience despite election uncertainty

New Zealand’s economy is showing signs of recovery, with recent data indicating stronger-than-expected macroeconomic performance and resilient card spending. Despite potential headwinds such as rising fuel costs and global interest rate fluctuations, pockets of resilience are emerging across the NZX.

Analysis from ASB economists suggests that the common narrative of economic stagnation during election years is not supported by historical data. Research covering seven election cycles from 2005 to 2023 indicates that business investment, recruitment, and consumer spending often grow faster in the lead-up to an election rather than being paused. The study found that total business investment grew before five of the last seven elections, and employment typically continued to rise, with exceptions only during the Global Financial Crisis and the Covid-19 pandemic.