New Zealand Economy Shows Resilience with Q3 2025 Growth

Economic Performance Exceeds Expectations

New Zealand's economy demonstrated stronger-than-expected growth in the third quarter of 2025, with a 1.1% quarter-on-quarter increase in Gross Domestic Product (GDP). This performance surpassed analyst forecasts of 0.9% growth and significantly exceeded the Reserve Bank of New Zealand's (RBNZ) projection of 0.4%. The annual growth rate for Q3 2025 stood at 1.3%, marking a positive turn in economic activity.

Implications for Monetary Policy

The robust GDP growth data has reduced the likelihood of further interest rate cuts by the RBNZ. Economists at ASB Bank noted that while the economy has shown improvement, significant spare capacity remains, indicating that the recovery is still in its early stages. The positive GDP figures suggest that the economy is gradually recovering from a prolonged period of weak activity.

Market Reaction and Future Outlook

The better-than-expected GDP growth is likely to influence market expectations regarding future monetary policy decisions. With the economy showing signs of stabilization, the central bank may maintain its current policy stance, focusing on supporting the ongoing recovery without introducing additional stimulus.