New Zealand Economic Snapshot
Economic Forecast Summary (May 2021)
Economic growth is projected to pick up gradually from the second half of 2021, boosted by the progressive reopening of the border, reaching 3.5% in 2021 and 3.8% in 2022. Private consumption will remain robust, supported by the recent minimum wage increase and the wealth effect from rising house prices. Investment will expand on the back of strong house prices, record high issuance of building permits and large public infrastructure projects gaining momentum. Inflation pressure will strengthen as economic slack disappears by end-2022.
Reform Priorities (April 2021)
Going for Growth 2021 - New Zealand
The economy recovered strongly, supported by large policy stimulus and an effective response to COVID-19, but some sectors hardest hit by border restrictions, notably tourism, lag behind. The pandemic highlighted a number of structural challenges. A key priority is to address the deteriorating access to affordable housing, which weakens financial resilience, hampers labour mobility and reduces inclusiveness.
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2021 Structural Reform Priorities
- Housing: Increase supply and quality of affordable housing
- Innovation: Promote innovation in tandem with export and foreign direct investment
- Labour market: Introduce a short-time work scheme and enhance support for unemployed jobseekers
- Education: Improve outcomes for students from vulnerable socio-economic backgrounds
- Child poverty: Monitor the impact of the COVID-19 crisis on income and material hardship and step up support if needed