New Zealand

New Zealand Economy Shrinks 0.9% in Most Recent Quarter

Published SEP 18 2025

Story

Above: The skyline of the Auckland Central Business District in Auckland, New Zealand. Image credit: Didier Marti/Getty Images

The Facts

New Zealand’s gross domestic product (GDP) declined by 0.9% in the June 2025 quarter compared with the previous March 2025 quarter, according to new figures published on Thursday by Statistics New Zealand.
Reuters
Stats NZ
RNZ
The fall in GDP was worse than forecast by economists and the Reserve Bank of New Zealand, who had previously factored in a downturn of 0.3%, and means the economy has contracted in three of the last five quarters, with annual GDP decreasing 0.6% compared to Q2 2024.
Bloomberg.com
The Straits Times
Stats NZ
The statistics showed that GDP per capita and expenditure on GDP also fell by 1.1% and 0.9%, respectively, in Q2 2025, while real gross national disposable income rose by 0.9% and by 0.7% per capita in comparison.
Stats NZ
Broken down by production, the weakest sectors of the economy during the quarter included manufacturing, which declined by 3.5%, the construction industry, down 1.8%, and primary services, which fell by 0.7%.
Stats NZ
Of the few economic sectors that did not contract, internet services and telecommunications grew the most at 1.8%, followed by wholesale trade, as well as rental, hiring and real estate services, which grew at 1.4% and 0.7%, respectively.
Stats NZ
After the weaker-than-expected data release, the New Zealand dollar fell by nearly 1% against the U.S. dollar to $0.5904, while two-year swap rates declined 10 basis points to their lowest levels since early 2022.
Bloomberg.com
The Straits Times
MarketPulse

Sources Split

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RIGHT

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CRIT

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ESTAB

The Spin

Pro-government narrative

This downturn stems directly from the international turmoil and uncertainty caused by U.S. trade policy, rather than any decision-making by the New Zealand government. Before these external shocks, the economy had been growing strongly for six months, and signs already point to its recovery as interest rates fall and mortgage lending increases.

New Zealand Government

Government-critical narrative

This latest economic contraction reveals the government's fundamental mismanagement of the economy and the emptiness of Luxon’s promises to fix its foundations. While Australia's economy grew by 0.6% over the same period, New Zealand is heading backwards — with thousands losing jobs, businesses struggling to survive and record numbers of residents fleeing overseas.

New Zealand Labour Party