So that’s official … sort of.
I’m not sure there is an official definition of economic recovery.
Perhaps it’s the opposite of a recession, which is two successive quarters of economic contraction.
On that basis, we’ll find out if we have managed two successive quarters of growth on March 19 when we get GDP data for the fourth quarter of 2025.
We had GDP growth of 1.1% in the third quarter of 2025, and there has been plenty of data in the past few months to suggest the economy has continued to grow.
You’d think that would make people happy.
But most of the feedback I’ve received for covering the economic recovery has been negative.
Some people seem really annoyed by the idea that things are getting better, not worse.
It’s not like I choose to be reporting on a recovery.
For a business reporter, it’s more fun covering crashes and recessions.
Bad news sells.
But the recovery is happening, and on a personal level, I’m glad.
Of course, I want to see New Zealand thrive.
So why do people get so upset when we report upbeat economic news?
There are two common themes I hear.
One is that people, or their business, or people they know, are still struggling; so how can we be talking about recovery?
This was acknowledged by Breman when she talked about the fledgling state of the recovery last week.
Reserve Bank Governor Anna Breman in the bank’s Wellington boardroom. Photo / Mark Mitchell
“It’s true that many households will not feel this yet – they’re still feeling the high inflation that we had over the past few years,“ Breman said.
“So many businesses are still struggling, but what we are saying is that the data is showing us that we are at the early stages of a recovery, and we want to keep the OCR on hold to support the recovery while ensuring that inflation falls back to target.”
None of this should be surprising.
When it comes to economic cycles, it is well documented that some of the worst parts of a downturn – rising unemployment and business failure – are the last things to turn around.
They are what economists call “lagging data”.
So we see, for example, data released on Friday showing that 2025 saw the highest level of business insolvencies since the GFC.
A report from BWA Insolvency showed 3132 liquidations, receiverships and voluntary administrations were recorded in 2025, an 11.3% increase on 2024 and the highest annual total in 15 years.
Hopefully, those figures have peaked, but they will still be elevated, which means there will be plenty of businesses struggling and going to the wall this year.
At a time when the economic headlines are increasingly upbeat, that can seem incongruous.
I think it is important to consider what the word “recovery” actually means.
The dictionary definition is: “The process of becoming well again after an illness or injury.”
Talking about an economy in recovery doesn’t imply we have a healthy economy.
In fact it implies the exact opposite.
If you break your leg, you are more or less in recovery from the moment you get the cast on. But you’re not going to be running a marathon any time soon.
The other line of complaint is that there is political bias involved, that I’m talking up the recovery to help the Government.
I could take this personally and point out all the abuse I’ve received over the years for being a woke, liberal, lefty, and so on.
But I think it’s easier to just say that I don’t give this Government much credit for the current recovery.
New Zealand’s economy isn’t really that complicated.
We’ve had stimulatory monetary policy settings in place for almost a year now, and we’re into our second year of an export commodity boom.
It’s not surprising that the economy is growing again. If anything, it’s surprising that it has taken this long for the recovery to kick in.
What this Government should be judged on is its ability to create conditions for a sustained period of growth.
The jury is still out on that.
That raises the distinction we ought to make between a cyclical economic recovery and the big structural issues that still plague our economy.
Reporting on a cyclical upturn shouldn’t be seen as absolving the Government of responsibility for bigger issues – like managing debt, building infrastructure and reducing inequality.
All this recovery talk does not address the structural inequalities in our economy.
I think that is where some of the anger comes from.
Reporting that things are getting better can seem cruel when for many people, they clearly aren’t.
I hate to be cynical, but even if this economy were booming, there would still be people struggling to survive.
No rule says that what you or I, or our friends, family or neighbours, are experiencing on a personal or micro-economic level must bear any relation to conditions on a macro-economic level.
Some people get richer in recessions, some people go bankrupt in booms.
Statistically, though, if economic conditions are good, if we have growth and business expansion, then more people should be doing better than in a recession.
Economic growth creates stability, a platform for people to improve their lot.
The longer the growth can be sustained, the more people are likely to be able to benefit from the conditions.
But even a long period of growth isn’t a guarantee of universal prosperity.
It’s easy to forget that before Covid, New Zealand had the second-longest period of continuous growth in its history.
We had nearly 11 years without a recession from March 2009 until March 2020. That’s 43 quarters of consecutive growth.
I’m sorry to say that poverty was still a problem during that era; we still had the homeless and jobless, and businesses failed.
Those big structural issues are harder to deal with. They require policy changes and investment and, ultimately, cultural change.
I’m hopeful that if we can get back to a period of stable, sustained growth, we’ll grab the opportunity to make those sorts of change.
Otherwise, I’ll be writing about recessions again soon enough.
Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.
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