NZ growth figures this week could help firm up expectations of interest rate rise in July
Monday, 15 June 2026
Figures on Thursday are expected to show the economy grew solidly in the first three months of the year before the Middle East fuel shock hit home.
The Reserve Bank, ANZ and Westpac are tipping GDP grew by a full percentage point in the March quarter, with BNZ forecasting 0.9% growth and Kiwibank expecting Stats NZ will report a 0.7% rise.
Out of Stats NZ’s big trifecta of quarterly unemployment, inflation and GDP figures, the latter tends to be the hardest to forecast and is most commonly subject to significant revisions.
ANZ senior economist Matthew Galt said growth in line with its forecasts could help shore up expectations of a 25 basis point rise in the Official Cash Rate in July.
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More recent economic data suggested momentum in the economy had slowed since the end of March, but that was looking “more like a stall than an abrupt contraction at this stage”, he said.
Westpac senior economist Michael Gordon said seasonal distortions would add about 0.4 percentage points to the March quarter result, but the underlying picture was “still reasonably healthy in the early part of this year”.
Read more about what GDP is and how it is calculated here.
The direction from the end of March is less certain.
Treasury forecast in the Budget that the economy would grow by a healthy 2.3% in the year to the end of June next year, and 3.2% the following year.
A reasonably prompt return to solid economic growth will be key to the Government meeting Treasury’s forecast of a return to surplus by the year ending June 2029.
But some economists have suggested Treasury’s medium-term outlook is optimistic.
Westpac is forecasting a drop of 0.4% in GDP in the current June quarter and Kiwibank economist Alexandra Turcu described Thursday’s update as the calm before the storm.
“Both global and New Zealand growth is likely to go south from here for the foreseeable future, until the war in Iran is resolved,” Turcu said.
She said monthly selected-price-index data for May, due on Tuesday, would be more important to the Reserve Bank when it next considered whether to raise the OCR from its current level of 2.25%.
Gordon said the central bank’s focus appeared to be more on forward-looking indicators of inflation.
BNZ said the first-quarter GDP data had a sense of being old news, especially given developments in the Middle East, but was worth keeping an eye on as it set the starting point for the economy, going into the fuel shock.