{"id":600103,"date":"2026-09-14T13:36:22","date_gmt":"2026-09-14T13:36:22","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/600103\/"},"modified":"2026-09-14T13:36:22","modified_gmt":"2026-09-14T13:36:22","slug":"major-bank-warns-el-nino-impact-could-slow-gdp-growth","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/600103\/","title":{"rendered":"Major bank warns El Ni\u00f1o impact could slow GDP growth"},"content":{"rendered":"

Westpac Bank is warning developing El Ni\u00f1o conditions<\/a> could impact badly on pasture-based agriculture, particularly dairy, sheep and beef.<\/p>\n

El Ni\u00f1o increases the risk of drought<\/a> in many parts of New Zealand – especially in eastern regions and the upper North Island – which can reduce pasture growth, lower production, lift costs and disrupt processing patterns across the season.<\/p>\n

Senior Westpac economist Michael Gordon said previous drought impacts suggested it could potentially slow GDP growth by as much as one percentage point in a “worst-case scenario”.<\/p>\n

“There is still no certainty around how this big climate pattern translates into localised weather patterns in New Zealand, but certainly there are heightened risks there.”<\/p>\n

He said while the impacts were mostly concentrated to the primary industries it could have flow-on effects for other industries like transport and food processing.<\/p>\n

For consumers, Gordon said there was a risk it could raise the price of some imported food products.<\/p>\n

“It’s perhaps more a question of what happens to prices of a lot of the foods that we import.<\/p>\n

“Because this is an event that is affecting many parts of the world – it can affect crops in Australia and in Indonesia – it’s difficult to trace all the effects of that but it generally means some upwards pressure on prices.<\/p>\n

“And it can be things like quite subtle events like vegetable oil prices going up. There’s a little bit of that in everything.”<\/p>\n

He said while more livestock flowing through to processors during drought will push meat prices down, the following year it would likely see prices up as herds rebuild.<\/p>\n

One advantage is that in dairy and meat, much of the production occurs before drought becomes a major issue<\/a>, which naturally limits the impact.<\/p>\n

Gordon said New Zealand’s farmers were fairly resilient, have already adapted many systems and had had an early warning about this event.<\/p>\n

He said greater irrigation coverage, stronger drought preparedness and favourable soil moisture conditions now, mean the sector is better placed than it was ahead of the last El Ni\u00f1o-led drought almost 30 years ago.<\/p>\n

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