New Zealand: 2026 Article IV Consultation-Press Release; and Staff Report

The 2026 Article IV Consultation discusses that the New Zealand economy was finding its footing in early 2026, before the onset of the Middle East war. Real gross domestic product is estimated to have expanded by 0.2 percent in 2025, supported by household consumption amid easing debt service costs and favorable export prices. New Zealand’s strong institutions and policy frameworks continue to support resilience, but the nascent recovery is being delayed by the oil price shock and elevated uncertainty. Growth is projected to strengthen as energy prices normalize and confidence recovers. Fiscal policy should continue to balance near-term support for the recovery with credible medium-term consolidation. The authorities’ targeted and temporary response to the oil price shock has been appropriate, protecting vulnerable households while preserving price signals and fiscal space. Financial stability risks remain contained. Banks are well capitalized, liquid, profitable, and supported by stable funding. Continued structural reform efforts are needed to revive productivity growth and translate New Zealand’s strong artificial intelligence preparedness into economic gains while managing its impact on worker displacement.