The Organisation for Economic Co-operation and Development has published its Economic Survey of New Zealand, projecting that the economy will strengthen as lower interest rates and resilient exports support activity, even as domestic demand for goods and services remains subdued. The survey forecasts gross domestic product growth of 1.4% in 2026 and 2.3% in 2027. Inflation, which was 2.8% in 2025 and within the 1% to 3% target range, is projected to rise to 3.4% in 2026 before easing to 2.4% in 2027. The report says fiscal consolidation should continue to address the structural deficit, while monetary policy should look beyond initial fuel price shocks and keep inflation expectations anchored. It identifies population ageing as the main fiscal pressure, with health and pension costs expected to rise by around 5% of gross domestic product by 2060, and calls for a pension reform package that links the public pension eligibility age to life expectancy, raises default KiwiSaver contributions and shifts private pension taxation from contributions and returns to withdrawals. The survey also recommends creating a transparent Firming and Flexibility Market to reduce electricity supply shortages, improve affordability and break the gas electricity price link, and it sets out measures to deepen capital markets through a relaunched public growth equity market, a simplified equity savings account, a Business Growth Fund and a national loan securitisation platform for small and medium-sized enterprises. A prolonged conflict in the Middle East is highlighted as a key downside risk that could increase sustained inflation pressures, fuel shortages and weaker growth.

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