ANZ Data Wrap

ANZ Data Wrap is a weekly report containing reviews and previews of the latest economic indicators and financial market developments.

2025 editions

28 March 2025

Consumer confidence and monthly filled jobs data provide a timely reminder that while the economy is clearly responding to lower interest rates, momentum in the household sector is still sub-par.

Regional GDP data this week confirmed Wellington’s share of national GDP continues to trend lower – a multi-decade trend opposed to something to pin on the current fiscal stance.

Globally, markets are holding their breath for Trump’s 2 April tariff announcements, but US trade policy is unlikely to shift the dial for broader economic momentum in NZ by much.


21 March 2025

The economy bounced off the bottom in Q4, confirming a recovery is underway in the economy, though from a very weak base. We've nudged up our Q1 GDP forecast from 0.4% q/q to 0.6% q/q, though the outlook thereafter is broadly unchanged. February's REINZ housing snapshot showed activity is picking up and prices on the rise. The Performance of Services Index slipped back into contractionary territory in February, after January's strong bounce.


14 March 2025

This week brought the last of the partial GDP indicators, with a rebound in manufacturing sales volumes driven by meat and dairy. For next Thursday’s Q4 GDP release we’ve pencilled in a 0.4% q/q expansion, unchanged from our prior forecast and confirming a gradual recovery is underway. Forward indicators this week (our Truckometer, PMI, and to a lesser extent card spending) suggests the recovery has continued into Q1. The February SPI data continues to hint at mild upside risk to our (and the RBNZ’s) Q1 CPI forecast – just not enough to warrant a forecast tweak. It’s been a whippy and volatile week in global bond markets, but the kiwi is little changed this week.


7 March 2025

Despite a challenging global trade environment, New Zealand’s external sector finished 2024 on a strong footing with the merchandise terms of trade up 3.1% q/q in Q4.

The headline GDT Price Index fell 0.5%, but that result was better than the 4% decline that futures pricing had suggested going into the auction. 

The volume of building work put in place fell 4.4% q/q in Q4, much weaker than we had expected, shifting the balance of risks to our Q4 GDP forecast of +0.4% q/q mildly to the downside, though the bulk of partial GDP data are out next week, which may see that change.

Key fiscal indicators for the seven months to January were in slightly better shape than forecast at HYEFU 2024, but it’s not one-way traffic. Overall, we think the skew of risks around the Treasury’s economic growth and tax outlook come Budget 2025 skew marginally to the upside.


28 February 2025

Economic indicators continue to align with our view that the economic recovery is underway, with some mild upside risk to our Q4 GDP forecast emerging. But while the trajectory is positive, we certainly wouldn’t characterise the current economic pulse as “strong”. On the inflation front, headlines and data this week made for mixed reading.

The Q4 retail trade survey and monthly filled jobs for January suggest the economy could be picking up a little faster than forecast.

Our Business Outlook shows firms are still expecting better times ahead, but experiencing relatively soggy (but improving) demand right now. Our Consumer Confidence survey echoes that sentiment.

Potential changes to the NHI levy represent a small upside risk to the CPI inflation outlook.

The Government’s signalled lift in defence spending represents a minor upside risk to bond issuance, but this is not something we’d currently centralise – more details are required.


21 February 2025

As universally expected, and as strongly signalled in November, the RBNZ cut the Official Cash Rate (OCR) by 50bp to 3.75% this week.

We’ve updated our own OCR forecast, adding 25bp cuts in May and July (in addition to April), taking the OCR to 3%. This forecast balances numerous risks on both sides, and we’ll be watching the data keenly (as will the RBNZ) to see which way things are leaning.

This week we published our latest Quarterly Economic Outlook, which in addition to outlining our central forecasts, it discusses the risks, complexity and uncertainty regarding the impacts of US trade policy on New Zealand.

Data highlights: The January PSI corroborated the signal in our Business Outlook that activity across services industries is off the floor. REINZ data suggests housing demand is responding to lower mortgage rates. And next week, the Q4 retail trade survey will give us our first feel for the risks around our Q4 GDP forecast of 0.4% q/q (RBNZ +0.3%). 


14 February 2025

We expect a 50bp cut in the OCR to 3.75% next Wednesday. That would be consistent with RBNZ November messaging, economists’ forecasts, and market pricing.

The RBNZ’s survey of expectations for Q1 showed a mild lift in inflation expectations one year from now, from 2.05% in the 2024 Q4 survey to 2.15%. But the 2-year, 5-year and 10-year measures fell – all of which remain anchored close to 2%.  

The January SPI data was a little stronger than we expected, presenting some upside risk to our Q1 CPI forecast. However, this is largely stemming from the volatile components, meaning payback in February and March is likely. We don’t think these data warrant a tweak to our Q1 CPI forecast of 0.8% q/q. 


7 February 2025

This week’s Q4 labour market data were broadly as expected, all but locking in a 50bp cut from the RBNZ at its next meeting on 19 February. 

With the Q4 data in the bag, we’ve updated our forecasts. There was nothing in these data to suggest the labour market is on a radically different path from the RBNZ’s expectations. In fact, our updated forecasts show the unemployment rate peaking at 5.3% across the first half of 2025, slightly lower than previously and closer to the RBNZ’s 5.2% November pick. 

We also discuss the NZD’s struggles over the past year, reflecting New Zealand’s weak growth performance, rapid policy easing by the RBNZ, ongoing challenges in China’s economy, and a general risk aversion element too, given the enormous policy uncertainty globally, particularly the rapidly evolving and unpredictable threat of a tariff war on multiple fronts.


31 January 2025

Global financial markets have gotten off to a rocky start in 2025, and while there have been a multitude of drivers, US market perceptions of the potential impact of President Trump’s second term (“Trump 2.0”) have been the most influential. Among the more visible impacts on markets have been higher bond yields and a stronger USD, and an increase in volatility. 

A stronger USD aligns with the market’s broad view that Trump’s America-first agenda is likely to advantage the US economy, at least initially. Trump’s tariff agenda has also brought with it fears of a pickup in inflation, and that has, in turn, been one of the factors driving US interest rates and bond yields higher, providing another leg of support to the USD.

Looking ahead to next week, the highlight of the domestic calendar will be the Q4 labour market data, to be released on Wednesday at 10:45am. While the New Zealand economy appears to have bottomed out and is now recovering, the labour market is still playing catch-up to the past slowdown in activity. We expect the unemployment rate lifted from 4.8% in Q3 to 5.1% in Q4, in line with the RBNZ’s November MPS forecast.


24 January 2025

Annual CPI inflation was stable at 2.2% in Q4, but the details suggest the underlying disinflation trajectory remains intact.

Reflecting recent NZD weakness and oil price strength, our updated CPI outlook includes higher tradable inflation over the next few quarters. That’s expected to cause headline inflation to rise in the near term, but not in a persistent way. Given indicators of capacity stretch suggest there’s still more domestic disinflation in the pipeline, the RBNZ are likely to look through a little temporary strength on the tradables side, but they’ll be keeping a very close eye on inflation expectations.   

In other data this week, annual net migration inflows continue to ease, with high departures and still-elevated arrivals meaning there’s still plenty of churn. Meanwhile, the recovery in short-term visitor arrivals continues to stagnate. 


17 January 2025

The NZIER’s Q4 Quarterly Survey of Business Opinion (QSBO) corroborates the signal from our Business Outlook survey that economic activity is picking up from subdued levels now that interest rates are on the way down. Most importantly, the data suggest the economy is evolving broadly as the RBNZ expects. 

The Q4 CPI is released next Wednesday (22 January). We expect annual headline inflation to come in unchanged from Q3 at 2.2% (0.5% q/q), a touch higher than our previously published forecast and the RBNZ’s November MPS forecast of 2.1% (0.4% q/q). However, non-tradable inflation is expected to continue its gradual deceleration, slowing from 4.9% y/y to 4.7% y/y, in line with the RBNZ’s November MPS forecast. Tradables inflation is expected to come in stronger than the RBNZ’s forecast (ANZ +0.2% q/q; RBNZ: -0.2% q/q), but this shouldn’t derail a 50bp cut in February provided non-tradable and core inflation remains on the right path.