Outlook 25: how fast can NZ recover?

There is light at the end of the tunnel for New Zealand’s economy in 2025 – but it might be brighter for some.

The big question for the year ahead is not if the economy will recover, but rather, how fast.

With interest rates slowly coming down, it’s reasonable to expect 2025 will be a better year than 2024. But it’s worth bearing in mind there are still some sticky elements to the inflation picture.

In my view, there's nothing set in stone about the Reserve Bank of New Zealand's easing path, and the central bank will continue to feel its way from here, watching the data very closely.

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We're in a part of the business cycle where there are clear green shoots, but there are also withering plants from the damage done over the past year or two.

Cash is king, and one firm's challenges may very well be another firm's opportunities. Businesses with low debt and robust balance sheets may find 2025 is a good time to grow.

The year 2025 looms as another exciting one for businesses, with persistent inflation and geopolitical change creating a landscape of uncertainty and opportunity in the Asia-Pacific region.

The increasing speed of digitisation, dawn of the real-time economy, and shifting supply chains will all also have a role to play in shaping the macroeconomic environment.

At ANZ Institutional, we know business are looking to position themselves to take advantage of these trends.

As part of our Outlook 2025 series, we’re asking our subject-matter experts to provide insights into a range of complex areas from across close to 30 markets – helping you better understand how you can prepare for the New Year. We’ll be sharing the responses over the coming weeks.

The challenge is the economic recovery won't be instant.

ANZ Research expects there will be further rate cuts in NZ during the first half of 2025, which will sow the seeds of recovery for the rest of the year.