Insights with Infinance by Brian Coogan
First quarter, March 2026 Gross Domestic Product (GDP) results announced on June 18 by Statistics NZ show strong results.
With 0.8% growth, this is a clear sign of sustained recovery in the New Zealand economy, GDP being the key metric of economic health.
Buoyed by strong results in primary industries, wholesale trade, manufacturing, and the services sector, GDP continues an upward trend since June 25, outperforming trading partners like the US, UK, EU, Japan and Australia.
We’re encouraged by the state of the economy that’s produced these results.
This means the hard work that was done to bring us back to positive growth has paid off, entering a new chapter of economic prosperity.
That is, of course, historical data taking us up to March 26. Since then, we’ve entered into another phase with geopolitical events placing upward pressure on inflation and that needs to be addressed.
With the next OCR announcement on July 8 and inflation figures on July 21, we’re expecting a slight increase in both for a few months which will affect interest rates accordingly, as inflation abates once things settle down in the Middle East.
Some economists are touting OCR up to 3% by the end of the year as a “happy place” which is neither stimulative nor restrictive. In the next OCR announcement, on July 8, I’m expecting a 0.25% increase, taking it to 2.5%.
The Reserve Bank has its hands on the levers and are the only ones that make the decisions. It appears to be in a more stimulative mode as the economy continues to grow.
So, watch this space. The good news is the framework is in place for economic recovery to resume once the effects of the Middle East abate. We’ll just be parked at the terminal for a bit to offload some excess baggage then continue our journey.
For more on the above and links to Stats NZ reports with all the numbers, go to www.infinance.co.nz/insights
By Brian Coogan, Licensed Financial Adviser and Director at Infinance – Taupō.