International
support

In more than 90 countries

New Zealand

Key data Change country

Economic and political overview

Economic Overview

Thanks to exemplary pandemic management, New Zealand rebounded quicker than many other advanced economies. This resilience bolstered economic activity, complemented by robust investment and consumption, facilitated by generous fiscal and monetary support. However, after considerable policy tightening, the economy decelerated in 2023 (+0.6%) and struggled in 2024, facing tight financial conditions. While inflation successfully returned to target and the current account deficit narrowed, real GDP is estimated to have contracted by 0.5% year-on-year, largely due to a significant decline in investment. Growth is expected to rebound to 1.4% year-on-year in 2025, accelerating further to 2.7% in 2026. The normalization of monetary policy is likely to support consumption and investment, with net exports also contributing to aggregate demand. Over the medium term, economic growth will be driven by migration, while productivity growth is forecast to remain modest unless significant structural reforms are implemented (IMF).

In the year ended June 2024, the general government net operating deficit narrowed to NZD 3.1 billion, compared to NZD 6.7 billion in the previous year. Total operating income rose by 9.7%, driven by higher tax revenue, while operating expenditure increased by 7.0%, following a 3.4% rise in 2023. The growth in expenditure was largely due to higher social benefits (up NZD 4.3 billion), employee expenses (up NZD 3.5 billion), interest expenses (up NZD 1.7 billion), and depreciation (up NZD 1.2 billion). The New Zealand government has forecast a budget deficit of NZD 17.31 billion (USD 10.02 billion) for the fiscal year ending June 30, 2025. It now no longer expects the government’s books to show a surplus during the five-year fiscal period ending June 2029. Government data shows that net core Crown debt reached NZD 175.5 billion (42.5% of GDP) as of 30 June 2024, marking an increase of approximately NZD 20 billion from the previous year. Despite high debt service costs and a slowing economy, non-performing loans have risen modestly compared to past recessions. Banks are well-capitalized with adequate buffers. Credit growth remains weak due to low demand. Housing sales are slowly increasing, with prices stabilizing 25% above pre-pandemic levels, while affordability improves as nominal incomes rise. Weaker global prices and tight monetary policy brought inflation to target after 13 consecutive quarters (2.2% as of December 2024), prompting the Reserve Bank of New Zealand (RBNZ) to reduce the Official Cash Rate (OCR) by 175 basis points to 3,7% over four cuts since August 2024. High-frequency data indicates a nascent economic recovery, with improved business and consumer confidence in Q4 of 2024.

Labour market conditions remain tight, characterized by record-high labour force participation and negligible slack, evidenced by historically low levels of unemployment and underemployment rates. This scenario has led to upward pressure on wages, especially within the services and construction sectors. While the recent surge in migration has alleviated some labour market strain, expectations for wage growth, particularly in the short term, remain elevated. Unemployment was estimated at 5.1% in 2024, from 3.7% one year earlier. It is forecast to remain stable this year and decrease to around 4.5% in 2026 (IMF). Some key social issues faced by the New Zealand government include dealing with an ageing population and increasing health care costs, boosting employment and household incomes, and increasing housing affordability.

 
Main Indicators 2024 (E)2025 (E)2026 (E)2027 (E)2028 (E)
GDP (billions USD) 257.73248.67259.16270.29281.65
GDP (Constant Prices, Annual % Change) -0.51.42.72.72.3
GDP per Capita (USD) 48,31046,12647,38348,70950,026
General Government Balance (in % of GDP) -5.6-5.3-4.3-3.1-2.0
General Government Gross Debt (in % of GDP) 51.255.358.459.859.0
Inflation Rate (%) 2.92.02.02.02.0
Unemployment Rate (% of the Labour Force) 4.75.35.34.74.5
Current Account (billions USD) -15.54-12.23-12.19-11.79-11.31
Current Account (in % of GDP) -6.0-4.9-4.7-4.4-4.0

Source: IMF – World Economic Outlook Database , Latest data available

Country Risk

See the country risk analysis provided by La Coface.

 

+

Main Sectors of Industry

New Zealand's economy is based on agriculture and services such as tourism, retail, and wholesale trade. Agriculture represents 5.8% of GDP and 5.6% of the total workforce (World Bank, latest data available). with pastoral farming and horticulture being the most important categories. Main agricultural products include dairy (the country is the 7th largest milk producer in the world in 2024), meat, wood, fruit (mainly peaches, plums, nectarines, drupe, cherries, apricots, and kiwi), vegetables, seafood, wheat, and barley. New Zealand also has a thriving wine industry and is rich in many natural resources, in particular gas, oil, and coal. During the first half of 2024, provisional figures indicated stability in New Zealand’s beef cattle population, which remained unchanged at 3.7 million compared to the previous year. In contrast, the number of sheep saw a decline, falling by 3% to 23.6 million. Meanwhile, the dairy cattle population experienced a modest increase of 1%, reaching 5.9 million (data Stats NZ). Figures from the Ministry for Primary Industries show that dairy export revenue is expected to rise 10% to NZD 25.5 billion by 30 June 2025, recovering from a decline in 2023/24. Horticulture exports, led by a record kiwifruit crop and higher gold kiwifruit production, are set to grow 12% to NZD 8.0 billion. Seafood exports are forecast to increase by 3% to NZD 2.2 billion, driven by strong demand, tight supply, and rebounding aquaculture.

Industry represents 19% of the GDP and 20.5% of the workforce (World Bank). Main industries include log and wood articles, food processing, manufacturing, mining, transportation equipment, construction, aluminium production, and paper products. The manufacturing sector as a whole is estimated to account for 9% of GDP. Statistics New Zealand's latest manufacturing sector survey reports a 2.3% growth in industry output for the 2023-2024 financial year, marking a gradual recovery after previous contractions. Total sector revenue reached NZD 55.3 billion, with productivity rising 1.8% year-on-year.

The services sector accounts for 67.1% of GDP and employs 73.9% of the active population (World Bank). Main services include financial services, real estate services, and tourism - which is one of the most important sources of foreign currency. Other important sectors include retail and wholesale trade, restaurants, and hotels. According to the latest figures from the National Statistics Institute, for the year ended March 2024 (in nominal terms), total tourism expenditure rose 14.6% to NZD 44.4 billion, an increase of NZD 5.6 billion from 2023. International tourism expenditure surged 59.9% to NZD 16.9 billion, nearing pre-pandemic levels (NZD 17.2 billion in 2019). As per the banking sector, by 2024, there were 27 registered banks functioning in the country, as per the Reserve Bank of New Zealand. In the same year, banks had USD 63.34 billion in total equity invested in New Zealand and spent USD 7.46 billion on operations. They paid USD 2.81 billion in tax and employed over 29,000 people. The five major banks paid USD 3.69 billion in wages to over 26,000 employees nationwide (data KPMG).

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 5.6 20.5 73.9
Value Added (in % of GDP) 4.6 19.6 67.4
Value Added (Annual % Change) 7.1 -1.0 1.8

Source: World Bank - Latest available data.

 
Monetary Indicators 20202021202220232024
New Zealand Dollar (NZD) - Average Annual Exchange Rate For 1 USD 1.541.411.581.631.65

Source: World Bank - Latest available data.

 

+

Foreign Trade

Foreign trade is an essential element of New Zealand's economy, which is one of the most open economies in the world. Trade represents around 51% of GDP (World Bank, latest data available). The country mainly exports agricultural products: in 2023, exports were led by milk and cream (14.0%), butter (6.2%), frozen bovine meat (5.7%), sheep/goat meat (5.4%), and rough wood (4.7%); whereas imports included petroleum oils (13.9%), motor vehicles (8.4%), telephone sets (2.8%), goods transport vehicles (2.5%), and turbojets and gas turbines (2.5% - data Comtrade).

New Zealand's major export partners in 2023 were China (26.9%), Australia (12.9%), the United States (12.1%), Japan (5.5%), and South Korea (3.5%). On the other hand, imports came chiefly from China (20.7%), Australia (10.8%), the United States (9.7%), South Korea (7.5%), and Japan (6.8% - data Comtrade). The country is a founding member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). A Regional Comprehensive Economic Partnership (RCEP) - the world’s largest trade agreement - was also signed in 2020 which includes 7 of New Zealand's top 10 trading partners and 16 countries in total: Australia, Brunei, Cambodia, China, India, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, Philippines, Singapore, South Korea, Thailand and Vietnam, and could eventually replace the CPTPP. Moreover, New Zealand signed a free trade agreement with the UK on 28 February 2022 and the European Union concluded negotiations for a comprehensive trade agreement with New Zealand on 30 June 2022, which was signed on 9 July 2023.

According to WTO data, in 2023, New Zealand’s goods exports totalled USD 41.4 billion against USD 50 billion in imports (-8% and -7.7% y-o-y). As per services, the figures stood at USD 16.5 billion and USD 18.4 billion, respectively. The country’s trade deficit was estimated at 2.9% of GDP in the same year by the World Bank, from 5.3% one year earlier. According to Stats NZ, in the year ending December 2024, New Zealand’s annual goods exports were valued at NZD 71.0 billion, marking an increase of NZD 2.4 billion compared to the previous year. Meanwhile, goods imports were valued at NZD 78.7 billion, a decrease of NZD 3.6 billion from the prior period. As a result, the annual trade deficit stood at NZD 7.7 billion, a significant improvement from the NZD 13.6 billion deficit recorded in the year ending December 2023.

 
Foreign Trade Values 20202021202220232024
Imports of Goods (million USD) 37,15249,85554,21949,95746,892
Exports of Goods (million USD) 38,37744,77745,10241,39942,410
Imports of Services (million USD) 11,41513,74917,22918,48319,307
Exports of Services (million USD) 11,9049,73410,80116,81418,326

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20202021202220232024
Foreign Trade (in % of GDP) 44.048.553.550.4n/a
Trade Balance (million USD) 1,478-4,133-7,750-7,430-5,238
Trade Balance (Including Service) (million USD) 2,054-8,061-13,865-9,383-6,200
Imports of Goods and Services (Annual % Change) -15.917.34.7-1.3n/a
Exports of Goods and Services (Annual % Change) -17.61.46.08.6n/a
Imports of Goods and Services (in % of GDP) 22.326.229.426.7n/a
Exports of Goods and Services (in % of GDP) 21.722.324.023.7n/a

Source: World Bank ; Latest available data

Foreign Trade Forecasts 2025 (e)2026 (e)2027 (e)2028 (e)2029 (e)
Volume of exports of goods and services (Annual % change) 3.44.34.44.44.4
Volume of imports of goods and services (Annual % change) 1.43.83.43.53.6

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
New Zealand has signed a free trade agreement (CEPA) with Hong Kong.
 

Main Partner Countries

Main Customers
(% of Exports)		 2024
China 25.1%
United States 12.7%
Australia 12.5%
Japan 5.4%
South Korea 3.0%
See More Countries 41.3%
Main Suppliers
(% of Imports)		 2024
China 21.4%
Australia 11.0%
United States 10.3%
South Korea 8.7%
Japan 5.6%
See More Countries 42.9%

Source: Comtrade, Latest Available Data

 

+

Political Outline

Current Political Leaders
Queen: Charles III (since 8 September 2022)
Governor-General: Cindy Kiro (since 21 September 2021) 
Prime Minister: Christopher Luxon (since 27 November 2023)
Next Election Dates
General elections: September 2026
Main Political Parties
New Zealand has a multi-party system and the main political parties are:

- National Party: centre-right, conservative, liberal
- Labour Party: centre-left, social-democratic, social equality and universal rights

Other parties include:

- Green Party: left-wing, social-democratic
- New Zealand First: centre, conservative, nationalist, populist
- Maori Party: centre-left, maori rights
- ACT: right-wing, liberal

Executive Power
The head of state is the British sovereign, represented in New Zealand by the Governor-General. The head of government is the Prime Minister, who is responsible for leading the government. The Governor-General is appointed by the monarch on the advice of the Prime Minister. The Cabinet is the most senior policy-making body and is led by the Prime Minister, who is the parliamentary leader of the governing party or coalition. While executive power is formally vested in the Governor-General, it is exercised on the advice of the Prime Minister and Cabinet, who oversee the implementation of laws and the day-to-day affairs of the country.
Legislative Power
The legislative authority is vested in a unicameral House of Representatives, which usually has 120 members but may have more due to overhang seats. Of these, 72 members are directly elected in single-member constituencies, including 65 general electorate seats and 7 Māori seats. The remaining members enter Parliament from party lists under the Mixed Member Proportional (MMP) system to ensure proportional representation. All members serve three-year terms.
 

+