Is 2027 finally our year?

We’ve been talking about it for a while, economic recovery. We’ve gone through the process of inflation and interest rate easing - done all the right things. 

Insights with Infinance by Brian Coogan 

Just as the economy was beginning to show signs of recovery, conflict in the Middle East delivered another shock—pushing up global oil prices, fuel costs and inflation. Treasury says that shock has delayed, rather than derailed, the recovery. 

And that distinction is important. 

The underlying economy is in considerably better shape for a recovery once the temporary inflationary effects of the Middle East conflict begin to ease.  

Treasury expects annual, average economic growth to strengthen from 1.2% in the year to June 2026, to 2.3% in 2027 and 3.2% in 2028. 

There are also some encouraging signs in the Government's books. The latest Treasury outlook points to stronger tax revenue, a smaller-than-previously-forecast deficit and an earlier return to surplus. That's not about politics—it is simply evidence that the fiscal position is moving in the right direction. 

But there is still some water to go under the bridge. 

New Zealand heads to the polls on November 7, with the official election results due on November 27. Then, almost immediately, Christmas arrives. 

So realistically, the opportunity for a sustained economic reset may sit beyond the holiday break. 

If inflation continues to moderate, interest rates remain supportive and confidence continues to return, 2027 could be the year New Zealand moves from talking about recovery to actually feeling it. 

For households, businesses and investors, that's the part worth watching. 

The hard yards aren't over—but the foundations for recovery are increasingly being put in place. 

Perhaps 2027 is when we finally get to build on them. 

For more on the above, go to www.infinance.co.nz/insights    

Written by Brian Coogan, Licensed financial Adviser and Director at Infinance - Taupo