BusinessNZ forecast points to nearly 3% growth by 2028, boosting confidence
New Zealand's economy is looking more resilient than expected, with two separate forecasters now pointing to the same conclusion: momentum is returning, even as global risks linger.
Two forecasts, one direction
The latest BusinessNZ Planning Forecast shows the BusinessNZ Economic Conditions Index (ECI) — a composite gauge covering growth, monetary settings, and business, and consumer activity — sitting at 13 for the September quarter, up 13 points on the prior quarter and 10 points higher than a year earlier. Any reading above zero signals improving conditions overall, while a negative score points to deterioration.
That reading lines up with a separate assessment from ratings agency Moody's, which said New Zealand's recovery was now under way, citing strong agricultural export prices, a tourism rebound and the delayed effects of earlier rate cuts. Moody's forecast real GDP growth of 1.6% for 2026, broadening to 2.3% in 2027.
BusinessNZ chief economist John Pask said the improvement follows an earlier dip, with overseas tensions still weighing on sentiment but domestic performance holding up better than anticipated.
"The ongoing conflict in the Middle East and heightened geopolitical tensions elsewhere continue to have an impact, but New Zealand's economy has fared better than expected with annual growth nearing three percent by 2028," Pask said.
Caution at the ballot box, not in the boardroom
Locally, that caution is most visible around the ballot box. Pask noted that uncertainty surrounding the upcoming general election has made investors more cautious, though it hasn't yet materially affected investment behaviour. Firms, he said, are largely pressing on regardless.
"Businesses are conscious of the risks both at home and abroad, but for the most part are getting on with business," Pask said.
Moody's flagged similar caution, warning that "the recovery is vulnerable to geopolitical tensions, global trade risks, El Niño conditions, and election-related uncertainty" given New Zealand's exposure as a small, open economy.
Credit growth signals opportunity for advisers
For mortgage advisers, the signals worth tracking are concrete: credit activity is reportedly increasing, and both the Performance of Manufacturing Index and Performance of Services Index have returned to expansion. Improving confidence typically flows through to lending appetite among both consumers and SMEs, which could support broker volumes into 2027 and 2028 if the trend holds.
That said, the recovery is unfolding against a tightening cycle: following the RBNZ's quarter-point hike to 2.75% on 2 September, major banks' forecasts for where the OCR ultimately peaks now range between 3% and 3.75%.
The BusinessNZ Planning Forecast draws on more than 30 economic indicators and bank forecasts each quarter. The full September 2026 report is available at www.businessnz.org.nz.
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