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NZ Finance Minister Warns 7.4% Inflation if Oil Spikes

4/23/2026

Summary

Willis Warns Inflation

New Zealand Finance Minister Nicola Willis said recovery is delayed but not derailed and warned worst-case inflation could reach 7.4%.
Scenario 1 (US$110 oil) forecasts 3.9% inflation, 2.0% GDP growth and 5.3% unemployment for June 2026.
Scenario 2 (US$135 oil) forecasts 5.2% inflation, 1.5% GDP growth and 5.4% unemployment for June 2026.
Scenario 3 (US$180 oil) forecasts 7.4% inflation, 0.8% GDP growth and 5.7% unemployment for June 2026.

Summary

Willis Flags Oil

Finance Minister Nicola Willis said on Thursday, April 23, 2024 that the Iran conflict has pushed up global oil prices and raised New Zealand’s fuel costs.
She added that the conflict has eroded business confidence and dampened consumer sentiment, creating a broader slowdown in domestic demand.
Willis cautioned that these geopolitically-induced pressures increase medium-to-long-term risks to New Zealand’s economic outlook, even as the recovery remains delayed but not derailed.

Summary

Willis Faces Downgrade

Moody’s and Fitch shifted New Zealand’s sovereign-rating outlook to negative from stable.
Treasury warned that rising debt and a delayed budget surplus prompted the agencies’ moves.
Finance Minister Nicola Willis said the government must cut spending to avoid a downgrade before the May 28 budget.
Willis added the budget will include a fuel-support package for low-income families to offset higher fuel costs.

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Willis Warns Inflation

New Zealand Finance Minister Nicola Willis said recovery is delayed but not derailed and warned worst-case inflation could reach 7.4%.
Scenario 1 (US$110 oil) forecasts 3.9% inflation, 2.0% GDP growth and 5.3% unemployment for June 2026.
Scenario 2 (US$135 oil) forecasts 5.2% inflation, 1.5% GDP growth and 5.4% unemployment for June 2026.
Scenario 3 (US$180 oil) forecasts 7.4% inflation, 0.8% GDP growth and 5.7% unemployment for June 2026.

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