The New Zealand Treasury’s fortnightly economic update finds that conditions remain mixed for households and businesses, but indicators point to a gradual strengthening consistent with the Pre-election Economic and Fiscal Update. Business confidence remains positive, employment indicators have firmed and resilient global demand is supporting exports. Higher fuel costs and job insecurity continue to weigh on households, although easing food inflation, flat rents and improving labour demand are expected to support real incomes and consumer spending later in 2026. Business confidence held at a net positive 52% in September despite a modest monthly decline and increased oil market volatility. Filled jobs rose 0.2% in August, marking the first consecutive monthly increases since early 2024, while annual job growth improved to 0.9%. The seasonally adjusted monthly trade deficit narrowed to NZD 0.1 billion from NZD 1.3 billion in July as exports rose 7% and imports fell 8.4%. Annual food inflation slowed to 1.9% and rents were flat, but annual petrol and diesel prices increased 17.9% and 45.8%, respectively. The global economy has proved more resilient to the energy shock than expected, according to the Organisation for Economic Co-operation and Development, supported by artificial intelligence investment and government measures. It projects global growth of 2.9% in 2026 and 3% in 2027, while raising its 2027 inflation forecast to 3.6%. Persistently high oil prices, geopolitical tensions and rising sovereign bond yields remain key downside risks to New Zealand’s outlook.
New Zealand Treasury sees gradual economic strengthening despite higher fuel costs and uncertainty
The New Zealand Treasury sees gradual economic strengthening as business confidence holds, employment firms and exports benefit from resilient global demand. Easing food inflation and flat rents should support households, but higher fuel costs, global uncertainty and rising bond yields remain material risks.