Full Breakdown
S&P Global Raises Outlook for New Zealand’s Economy
8/12/2026, 8:23:29 AM
Core Outlook and Forecasts
S&P Global has upgraded its outlook for the New Zealand economy, citing stronger-than-expected domestic demand and rising consumer and investor confidence. The agency kept its 2028 and 2029 real-GDP growth forecasts at 2.4 % and expects the unemployment rate to fall to 5.2 % by the end of 2026, down from 5.6 % in the most recent quarter. Further projections show unemployment slipping to 4.9 % the following year and 4.5 % by 2028. Inflation is forecast to return to the Reserve Bank’s 1-3 % comfort zone, reaching 2.4 % in 2027 and 2.3 % in 2028. The Official Cash Rate (OCR) is anticipated to peak at 3 % in the current cycle and remain steady thereafter.
Data & Statistics
- Real-GDP growth forecasts (2028-2029): 2.4 %
- Unemployment rate: 5.2 % by end-2026; 4.9 % next year; 4.5 % by 2028
- Inflation: 2.4 % in 2027; 2.3 % in 2028
- OCR peak: 3 % (currently 2.5 %)
Risks Highlighted by S&P Global
Despite the upbeat revisions, S&P Global warns of lingering risks. Energy-market uncertainty could erode real disposable incomes, the property market remains relatively weak, and net immigration has slowed. These factors could moderate the momentum seen in business investment.
Official Statements & Quotes
Vincent R. Conti, head of macroeconomic modelling at S&P Global, emphasized that the new growth outlook reflects a return to the economy’s potential after a period of under-capacity growth. He also noted that the agency’s view on inflation and policy rates remains unchanged.
- “Our inflation forecast bumps up only slightly. But we would note that our new growth forecasts represent a reversion to potential from a period of under-capacity economic growth,” — Conti
- “Despite these revisions, we continue to see some growth risks,” — Conti
