In 2023, New Zealand announced its entry into its second recession in just 18 months following the release of the latest GDP figures showing a contraction in the last quarter. According to Stats NZ, the country’s economy shrank by 0.1% in the quarter to December and 0.7% in per capita terms. This marks the second recession event in two years after a 0.3% contraction in the September quarter.
The data from Stats NZ revealed that New Zealand has experienced negative GDP figures in four out of the past five quarters, with an annual growth rate of just 0.6%. Despite this, expectations for the latest GDP figures were largely met, with the central bank forecasting a flat figure and bank economists suggesting a range of results between a narrow contraction and fractional growth.
Despite facing economic challenges, New Zealand’s economy has been partly supported by record migration, which saw a peak of 141,000 new arrivals in 2023. The population growth has helped stimulate an otherwise stagnant economy, preventing a more rapid decline in economic position. Regulation Minister David Seymour acknowledged the current economic conditions and stated that cuts would be made in New Zealand’s forthcoming budget, including reducing the number of government workers. Seymour described the situation as a slump that has been ongoing and impacting people’s daily lives.
