{"id":172302,"date":"2025-12-07T16:58:08","date_gmt":"2025-12-07T16:58:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/172302\/"},"modified":"2025-12-07T16:58:08","modified_gmt":"2025-12-07T16:58:08","slug":"new-zealand-set-for-economic-revival-in-2026-whats-fuelling-the-optimism","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/172302\/","title":{"rendered":"New Zealand set for economic revival in 2026 \u2013 what\u2019s fuelling the optimism?"},"content":{"rendered":"

The Official Cash Rate (OCR) has fallen 325 basis points (bps) since August last year to a more than three-year low of 2.25%<\/a>.<\/p>\n

Tuffley said even though the Reserve Bank \u201chas stopped cutting interest rates now, in our view, the impact will live on\u201d.<\/p>\n

\u201cThe average mortgage rate only really started to fall rapidly from the middle of 2025. It\u2019s now more than halfway through its likely fall from peak to trough, but that means there is still a substantial portion of New Zealand home borrowers who stand to benefit further.\u201d<\/p>\n

He said consumer spending is also up, especially on big-ticket items like cars and electronics.<\/p>\n

\u201cThere are already signs of a greater ability and willingness to spend.<\/p>\n

\u201cConsumer spending has been lifting for a year, and in the September quarter consumers went nuts in electrical and electronics stores.\u201d<\/p>\n

New Zealand\u2019s exports \u2013 particularly beef and dairy \u2013 have continued to thrive and show impressive resilience in the face of persistent trade challenges and tariffs, Tuffley said.<\/p>\n

\u201cAround a quarter of our US-bound exports are now exempt from the added 15% tariff and we\u2019re seeing strong growth in markets like China and Europe,\u201d he said.<\/p>\n

\u201cBeef export prices have been rocketing. So far, New Zealand is coping fairly well with the impact of US tariffs.\u201d<\/p>\n

Tuffley said this season\u2019s milk price returns will be at a good level and Fonterra farmer-shareholders are likely to receive a $3.2 billion capital return from the sale of its consumer business to Lactalis<\/a>.<\/p>\n

\u201cA good rural income backdrop will increasingly help once farmers and growers ensure their financial positions are in solid shape,\u201d he said.<\/p>\n

\"LowerLower interest rates are helping put more money in the back pockets of Kiwi households. Photo \/ NZME<\/p>\n

ASB\u2019s Quarterly Economic Forecast is forecasting a modest recovery in the housing market over 2026 with anticipated growth of around 3-4%.<\/p>\n

\u201cThe decline in mortgage interest rates is the main tailwind for housing, given that net immigration inflows will remain muted,\u201d Tuffley said.<\/p>\n

\u201cThe starting point for the market is a high level of outstanding listings available for sale. Fresh listings are coming on to the market faster than homes are being sold and continued construction will keep up a stream of property listings.\u201d<\/p>\n

House prices are likely to remain flat until the pace of sales is strong enough to start reducing the level of stock on the market, Tuffley said.<\/p>\n

He said the jobs market is also stabilising, with employment prospects expected to strengthen next year. High inflation will increasingly subside over 2026, easing pressure on household budgets.<\/p>\n

\u201cThe economy does look like it is turning the corner after a rocky ride since last year\u2019s sharp recession,\u201d he said.<\/p>\n

Cameron Smith is an Auckland-based business reporter. He joined the Herald in 2015 and has covered business and sports. He reports on topics such as retail, small business, the workplace and macroeconomics.<\/p>\n","protected":false},"excerpt":{"rendered":"The Official Cash Rate (OCR) has fallen 325 basis points (bps) since August last year to a more…\n","protected":false},"author":2,"featured_media":172303,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[2246,3225,23486,10668,219,5346,2082,5616,19060,78,700,75742,117,111,43,139,1536,69,29432,15407,29158,42303,111257,2919,1881,59744,1551,223,14605,102,379,80,2963],"class_list":["post-172302","post","type-post","status-publish","format-standard","has-post-thumbnail","category-new-zealand","tag-2246","tag-according","tag-asbs","tag-economic","tag-economy","tag-expected","tag-for","tag-forecast","tag-fuelling","tag-in","tag-latest","tag-mirror","tag-new","tag-new-zealand","tag-news","tag-newzealand","tag-next","tag-nz","tag-optimism","tag-pick","tag-putting","tag-quarterly","tag-rearview","tag-recession","tag-recovery","tag-revival","tag-set","tag-the","tag-whats","tag-with","tag-year","tag-zealand","tag-zealands"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/172302","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=172302"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/172302\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/172303"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=172302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=172302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=172302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}