The first gross domestic product (GDP) figures of 2026 arrive on Thursday, June 18, and will paint a picture of the economy during the first three months of the year.<\/p>\n
Despite New Zealand\u2019s economy growing just 0.2% in the December 2025 quarte<\/a>r, well below the Reserve Bank\u2019s projection of 0.5%, the Reserve Bank has penciled in a 1% increase in economic activity during the March quarter.<\/p>\n The GDP data will show how NZ\u2019s economic activity was tracking before the conflict in the Middle East began in February. The figures aren\u2019t expected to show much of the economic fallout from the global oil shock<\/a>\u00a0stemming from the conflict, as economists anticipate a much bigger impact to appear in GDP data releases later this year.<\/p>\n ANZ senior economist Matthew Galt said the March quarter GDP figures will signal how much momentum the economy had before the conflict in the Middle East broke out.<\/p>\n \u201cTimelier data shows that momentum has slowed markedly since the period covered by Q1 GDP. Higher fuel prices and economic uncertainty have clearly had an impact. However, at this stage it is looking more like the economy has stalled than gone rapidly backwards,\u201d Galt said.<\/p>\n ANZ has forecast a 1% increase in GDP during the March quarter, upping it from 0.9% and matching the Reserve Bank\u2019s forecast.<\/p>\n \u201cIndustries exposed to tourism, agriculture and discretionary spending are likely to show the most growth, though construction likely went backwards, based on the work put in place data. Residual seasonality also contributes positively this quarter,\u201d Galt said.<\/p>\n Westpac senior economist Michael Gordon said Westpac had raised its GDP forecast from 0.8% to 1% because of strong sectoral data that had been released this week \u2013 but the stronger forecast had two caveats.<\/p>\n \u201cThe first is that seasonal distortions mean that the reported result will overstate the underlying pace of growth. As we showed in our analysis last yea<\/a>r and as Statistics NZ has expanded on recently<\/a>, the methods used to calculate total GDP result in a \u2018balancing item\u2019 that in recent years has been both unusually large and strongly seasonal,\u201d Gordon said.\u00a0\u00a0<\/p>\n The second caveat is the expectation that the March quarter data will largely predate the US-Iran conflict.\u00a0<\/p>\n \u201cWe expect the effects to become more apparent in the data over the coming months \u2013 indeed, our recent Economic Overview incorporated a 0.3% fall in GDP for the June quarter, some of which is due to an unwinding of the seasonal distortion),\u201d Gordon said.<\/p>\n Old news<\/p>\n BNZ senior economist Doug Steel said despite the GDP data having a \u201csense of being old news\u201d due to it covering January to March, it will still set the \u201cstarting position\u201d for the NZ economy.<\/p>\n BNZ is casting its GDP forecast slightly lower than the Reserve Bank, ANZ and Westpac, expecting GDP to rise 0.9% in the March quarter.\u00a0<\/p>\n \u201cIf we are right, then Q1 [first quarter] GDP will not be far away from the 1.0% that the RBNZ projected in its May Monetary Policy Statement. We also suspect the data will add upside to the Reserve Bank\u2019s KiwiGDP nowcast<\/a> that sat at 0.5% last week,\u201d he said. \u00a0<\/p>\n BNZ had originally cut its quarterly forecast back to 0.7% following a fall of 3.5%<\/a> in seasonally adjusted building volume during the first three months of the year.\u00a0<\/p>\n Steel said the weak building result put the onus on the latest business financial data out of Statistics NZ<\/a> this week to deliver an indication of reasonable gains in value added across the manufacturing, wholesale trade and wider services industries.\u00a0<\/p>\n \u201cLike much data recently, there was a lot of noise, but the undercurrent was a clear lift in activity in the quarter,\u201d he said.<\/p>\n BNZ is expecting strong gains in manufacturing in the March quarter GDP, within meat and dairy processing, textiles, printing, metals, and transport equipment and machinery and equipment.\u00a0<\/p>\n \u201cPrimary sector Q1 GDP is expected to be positive, albeit with mixed detail. Milk production has been strong, but forestry and logging look to have declined in the quarter,\u201d Steel said.<\/p>\n ASB expects the NZ economy to have started with \u201cdecent momentum\u201d in the first three months of the year and to have expanded by 0.8% in the March quarter, according to senior economist Kim Mundy.<\/p>\n \u201cA decent Q1 2026 print is good news from the point of view that it provides a bit of a buffer heading into a more challenging time. But once again, we are faced with the reality that this release is dated,\u201d she said.\u00a0<\/p>\n \u201cHigher-frequency data since April do point to a cooling in economic activity. Businesses are facing higher input Calm before the storm<\/p>\n Kiwibank is expecting the lowest increase from the GDP figures next week, forecasting a quarterly lift of 0.7% in the March quarter.\u00a0<\/p>\n \u201cMuch of that expectation is due to the softer-than-expected December quarter, rather than impacts from the war in the Middle East. Most of the disruption hadn\u2019t hit our shores until the end of March. Even then, we didn\u2019t really feel it in the first quarter of the year,\u201d Kiwibank economist Alexandra Turcu said.<\/p>\n \u201cThere\u2019s no longer a question of whether the oil crisis is derailing our recovery. It is. The question is by how much and for how long? This is not Covid. Kiwi disposable incomes are being eroded away by increased fuel costs, businesses are facing reduced margins and, in some cases, losses. Projects are being deferred in hopes that prices will come down again in future, if not cancelled altogether.\u201d<\/p>\n Kiwibank believes the March quarter GDP will either \u201cstrengthen or weaken\u201d the Reserve Bank\u2019s decision to raise the Official Cash Rate (OCR) in July<\/a>, but noted that the Food and Selected Price Indexes from Statistics NZ will be of more interest to the central bank.\u00a0<\/p>\n
costs and squeezed margins at a time when consumer demand is faltering.\u201d<\/p>\n